C150356 Feasibility Study (financials)

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Bellyache Ridge Metropolitan District Notes to Financial Statements December 31 , 2012 1. Definition of Reporting Entity Bellyache Ridge Metropolitan District (the District), a quasi-municipal corporation, was organized pursuant to provisions of the Colorado Special District Act (Title 32). The District's service area is located in Eagle County, Colorado. The District operates under a Service Plan to construct sanitation and water facilities, and to provide for the development of a water system and and other public improvements. The District follows the Governmental Accounting Standards Board (GASB) accounting pronouncements which provide guidance for determining which governmental activities, organizations and functions should be included within the financial reporting entity. GASB pronouncements set forth the financial accountability of a governmental organization's elected governing body as the basic criterion for including a possible component governmental organization in a primary government's legal entity. Financial accountability includes, but is not limited to, appointment of a voting majority of the organization's governing body, ability to impose its will on the organization, a potential for the organization to provide specific financial benefits or burdens and fiscal dependency. The District has no employees and all of its management and professional services are contracted. The District is not financially accountable for any other organization, nor is the District a component unit of any other primary governmental entity. 2. Summary of Significant Accounting Policies The more significant accounting policies of the District are described as follows: Government-wide and Fund Financial Statements The government-wide financial statements include the statement of net position and the statement of activities. These financial statements include all of the activities of the District. For the most part, the effect of interfund activity has been removed from these statements. The statement of net position reports all financial and capital resources of the District. The difference between the assets and liabilities of the District is reported as net position. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. 7