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CITY OF GEM LAKE, MINNESOTA RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL ACTIVI TIES YEAR ENDED DECEMBER.31, 2014 NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS $ (27,824j Arnourits reported for governmental activities in the statement of activities are different because:. Governmental funds report capital outlays as expenditures:. However, in the statement of activities, assets are capitalized.and the cost is allocated. over their estimated useful lives. and reported as depreciation expense.. Capital Outlays $ 662 Depreciation Expense .(62,176} (61,514) Delinquent and deferred .property taxes and special assessrnents receivable will be.:collected subsequent to year-end; but. are not available soon enough to pay for the current period's expenditures and, therefore, are. unavailable: resources in the govern.rrtental.funds. Unavailable Resources - December 31, 2013 1.38.,223 ` Unavailable Resources - December 31, 2014 80,864 (57,359). The governmental funds report bond proceeds as. finahcing sources, while repayment: of bond principal is'.reported as an expenditure. In the statement of net position, however, issuing debt increases long-term liabilities and does not affect the statement of activities and repayment of principal reduces the liability. Also., governmental funds report -the. effect premiums and discounts when debt is first issued, whereas these amounts aredeferred and amortized in. the statement of activities. Interest is recognized as.an expenditure in the governmental funds when it is due: in the statement of activities, however, interest expense is .recognized as`it.accrues, regardless.of when it is due. The. net effect of these differences in the treatment of general obligation bonds and related items is as. follows: Repayment of Bond Principal Change- in.Accrued Interest. Payable Amortization of Bond ❑iscount CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES .see accompanying (Votes. to Basic Financial Statements: 0 1) 15,000 250 (463) 14,787 $ (131,910}