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Little Thompson Water District <br /> Notes to Financial Statements <br /> December 31, 2009 <br /> Note 1 -Summary of Significant Accounting Policies(Continued) <br /> Debt Related Deferrals <br /> Debt issuance costs, premiums and discounts and loss on refunding are deferred and amortized over the <br /> life of the debt using the effective interest method. Debt issuance costs are reported as intangible assets <br /> and the loss on refunding and net premiums and discounts are presented as a reduction of the face amount <br /> of the debt. <br /> Use of Estimates <br /> The preparation of financial statements in conformity with accounting principles generally accepted in the <br /> United States of America ("GAAP") requires management to make estimates and assumptions that affect <br /> the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date <br /> of the financial statements and the reported amounts of revenues and expenses during the reporting period. <br /> Actual results could differ from those estimates. <br /> Accrued Compensated Absences Payable <br /> In accordance with the provisions of the Governmental Accounting Standards Board Statement No. 16, <br /> Accounting for Compensated Absences, vested or accumulated vacation pay that is expected to be <br /> liquidated with expendable available financial resources is reported as an expense and a liability. <br /> The District has recorded a liability of$134,417 and $72,980 at December 31, 2009 and 2008, respectively. <br /> Contributions in Aid of Construction <br /> Contributions of cash, transmission lines and water rights to the District by developers, customers or by <br /> agreements with others are treated as capital contributions on the District's statement of revenues, <br /> expenses and changes in net assets. <br /> Net Assets <br /> Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net <br /> of related debt consist of capital assets, net of accumulated depreciation reduced by the outstanding <br /> balances of any borrowings used for the acquisition, construction or improvement of those assets. Net <br /> assets are reported as restricted when there are liabilities imposed on their use either through the enabling <br /> legislation adopted by the.District or through external restrictions imposed by creditors, grantors or laws or <br /> regulation of other governments. <br /> If applicable, the District applies restricted resources when an expense is incurred for purposes for which <br /> both restricted and unrestricted net assets are available. <br /> Reclassifications <br /> Certain reclassifications have been made to the 2008 financial statements to conform to those used in <br /> 2009. <br /> Note 2-Cash and Investments <br /> Deposits <br /> Colorado state statutes govern the District's deposit of cash. For deposits in excess of$250,000, Colorado <br /> Revised Statutes require the depository institution to maintain collateral on deposit with an official custodian <br /> (as authorized by the State Banking Board). The Colorado Public Deposit Protection Act("PDPA")requires <br /> the state regulators to certify eligible depositories for public deposit. The Act requires the eligible <br /> depositories with public deposits in excess of the federal insurance levels to create a single institutional <br /> collateral pool of obligations of the State of Colorado or local Colorado governments and obligations secured <br /> by first lien mortgages on real property located in the State. The pool is to be maintained by another <br /> institution or held in trust for all the uninsured public deposits as a group. The market value of the assets in <br /> the pool must be at least 102%of their uninsured deposits. <br /> 15 <br />