13-60 Lower S. Platte WCD - Grant Request

Home Browse Search

• Note A — Summary of significant accounting policies (Continued) • A.4 — Basis of Accounting Basis of accounting determines when transactions are recorded in the financial records and reported on the financial statements. Government -wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. • Revenues — exchange and nonexchange transactions — Revenues resulting from exchange transactions, in which each party gives and receives essentially equal value, are recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenues are recorded in the fiscal year in which the resources are measurable and become available. Available means that the resources will be collected with the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the District, available means expected to be received within sixty days of fiscal year -end. Augmentation fees, which are billed shorty after year -end, may or may not be received • within the sixty day period. These fees are expected to be collected within the sixty day period, and thus are recognized as revenues in the current period, even if receipt is delayed. Nonexchange transactions, in which the District receives value without directly giving equal value in return, include property taxes and grants. On an accrual basis, revenues from property taxes are recognized • in the fiscal year for which the taxes are levied. Revenues from grants are recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted, matching requirements, in which the District must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the District on a reimbursement basis. On a modified accrual basis, revenue from nonexchange transactions must also be • available before it can be recognized. Deferred Revenue — Deferred revenues arise when potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Deferred revenues also arise when resources are resources are received by the District before it has a legal claim to them, as when grant monies are received prior to meeting eligibility requirements In subsequent periods, when both revenue recognition criteria are met, or when the District has a legal claim to the resources, the liability for deferred revenue is • removed and the revenue is recognized. Expenses / expenditures — On the accrual basis of accounting, expenses are recognized at the time they are incurred. The measurement focus of governmental fund accounting is on decreases in net financial resources (expenditures) rather than expenses. Expenditures are generally recognized in the accounting period in which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation • and amortization, are not recognized in the governmental funds. A.5 — Encumbrances Encumbrances outstanding at year -end are considered immaterial and thus are not reported as • reservations of fund balances. A.6 — Short -term Interfund Receivables / Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as internal balances on the • government -wide statement of net assets, and are classified as due from other funds or due to other funds on the_ balance sheet. -15- •