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Note A — Summary of significant accounting policies (Continued) <br />A.12 — Net Assets <br />Net assets represent the difference between assets and liabilities. Net assets invested in capital <br />assets, net of related debt consist of capital assets, net of accumulated depreciation, reduced by the <br />outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. <br />Net assets are reported as restricted when there are liabilities imposed on their use either through the enabling <br />leg islation adopted by the District or through external restrictions imposed by creditors, grantors or laws or <br />regulations of other governments. <br />The District applies restricted resources when an expense is incurred for purposes for which both <br />restricted and unrestricted net assets are available. <br />A.13 — Interfund transactions <br />• Quasi - external transactions are accounted for as revenues, expenditures or expenses. Transactions <br />that constitute reimbursements to a fund for expenditures /expenses initially made from it that are properly <br />applicable to another fund, are recorded as expenditures /expenses in the reimbursing fund and as reductions <br />of expenditures /expenses in the fund that is reimbursed. All other Interfund transactions, except quasi - external <br />transactions and reimbursements, are reported as transfers. In general, the effect of Interfund activity has been <br />eliminated from the government -wide financial statements. <br />A.14 — Extraordinary and specials items <br />Extraordinary items are transactions or events that are both unusual in nature and infrequent in <br />occurrence. Special items are transactions or events that are within the control of the board of directors and <br />41" that are either unusual in nature or infrequent in occurrence. Neither type of transaction occurred during the <br />year. <br />Nate B - Cash and investments <br />Cash and deposits <br />Colorado State statutes govern the District's deposit of cash. The Public Deposit Protection Acts <br />(PDPA) for banks and savings and loans require state regulators to certify eligible depositories for public <br />deposits. The PDPA require eligible depositories with public deposits in excess of federal insurance levels to <br />create a single institution collateral pool of defined eligible assets. Eligible collateral included obligations of the <br />Urn ited States, obligations of the State of Colorado or Colorado local governments and obligations secured by <br />first lien mortgages on real property located in the state. The pool is to be maintained by another institution or <br />held in trustfor all uninsured public deposits as a group and not held in any individual government's name. <br />Th a fair value of the assets in the pool must be at least equal to 102% of the aggregate uninsured deposits. <br />Custodial credit risk — deposits — Custodial credit risk is the risk that in the event of a bank failure, the <br />District's deposits may not be returned to it. The District does not have deposit policy for custodial credit risk. <br />As of year -end, the bank balance of $78,342 was insured in its entirety. <br />• <br />-18- <br />0 <br />