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1 <br /> LOGAN WELL USERS,INC. <br /> NOTES TO FINANCIAL STATEMENTS <br /> ' Note 1. Nature of Business and Significant Accounting Policies <br /> ' Nature of business: Logan Well Users, Inc. (the Organization)was incorporated in 2003 under the laws of the State <br /> of Colorado. Its general purposes are to facilitate and fund the filing of well water augmentation plans and to obtain <br /> the necessary approvals needed by members in order for them to use their water wells. The Organization may also <br /> acquire or lease water to and from other entities. <br /> ' Members are generally farmers or other agriculture related entities that own and operate water wells along the South <br /> Platte River in southwestern Logan County, Colorado, and that have agreed to the inclusion of their water wells in <br /> the augmentation plan filed by the Organization. Members are not required to purchase shares in the Organization <br /> and are allowed one vote per member, regardless of the number of water wells owned and included in the <br /> augmentation plan. There are approximately 160 members as of December 31, 2012. <br /> The Organization is managed by a six-member board of directors, elected by the membership,that serve staggered <br /> three-year terms. <br /> ' The following is a summary of the Organization's significant accounting policies: <br /> Financial statement presentation: The Organization is required to report information regarding its financial position <br /> and activities according to three classes of net assets: unrestricted net assets,temporarily restricted net assets, and <br /> permanently restricted net assets. All of the Organization's net assets are considered to be unrestricted. <br /> Use of estimates: The preparation of financial statements in conformity with accounting principles generally <br /> ' accepted in the United States of America requires management to make estimates and assumptions that affect the <br /> reported amounts of assets and liabilities and disclosure of contingent asset and liabilities at the date of the financial <br /> statements and their reported amounts of revenues and expenses during the reporting period. Actual results could <br /> differ from those estimates. <br /> Cash and cash equivalents: For purposes of the statement of cash flows,the Organization includes all cash accounts <br /> and certificates of deposit, with maturities of three months or less, as cash and cash equivalents. <br /> ' The Organization's cash accounts are maintained in one commercial bank. At times,the balances in these accounts <br /> exceeded the federally insured limits. The Company believes it is not exposed to any significant credit risk on cash <br /> and cash equivalents. <br /> 1 <br /> 5 <br />