C150161 Feasibility Study

• Contract/PO #: C150161
• Contractor Name: Greeley and Loveland Irrigation Company
• Contract Type: Loan
• Water District: 4
• County: Larimer
• Loan Projects - Doc Type: Feasibility Study

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THE GREELEY AND LOVELAND IRRIGATION COMPANY
Greeley, Colorado
Notes to Financial Statements
October 31, 2002

Summary of Significant Accounting Policies

This summary of significant accounting policies of The Greeley and Loveland
Irrigation Company is presented to assist in understanding the Company's
financial statements. The financial statements and notes are representations
of the Company's management who are responsible for their integrity and
objectivity. These accounting policies conform to generally accepted
accounting principles and have been consistently applied in the preparation
of the financial statements.

Nature of Business

The Greeley and Loveland Irrigation Company is a membership organization
formed to operate as a mutual irrigation company which provides its members
wi th irrigation and domestic water. The Company operates a reservoir and
ditch system in the vicinity of Loveland to Greeley, Colorado.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.

The Company places its temporary cash investments with high credit quality
financial institutions. At times, such cash balances and temporary
investments may be in excess of the FDIC insurance limits.

Property and Eauipment

All property and equipment are depreciated over the estimated useful lives of
the assets (5-50 years), using the straight-line method.

Maintenance and repairs are charged to expense as incurred. When depreciable
assets are disposed of, the cost and related accumulated depreciation are
removed from the accounts and the resulting gain or loss is reflected in
earnings.

Deferred Income Taxes Payable

Temporary differences in the basis of assets and liabilities for financial
statement and income tax reporting arise from using different methods and
periods to calculate depreciation and different methods to recognize gain on
the sale of land and other fixed assets. Provision has been made for current
income taxes due on taxable income and for the deferred income taxes on the
temporary differences.

Income Taxes

The Company is exempt from Federal and Colorado income taxes under IRC
Section 501 (c) (12), if 85% or more of gross revenue is received from
shareholders. During the current fiscal year, the 85% test was not met,
therefore, the Company was required to file Federal and State Corporate
income tax returns.

Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.

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