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<br />-. <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />I <br /> <br />i <br /> <br />- <br />I <br /> <br /> <br />I <br />\ <br />I <br />\ <br />~ <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />II <br /> <br />I <br /> <br />II <br /> <br />THE JACKSON LAKE RESERVOIR AND IRRIGATION COMPANY <br /> <br />NOTES TO FINANCIAL STATEMENTS <br /> <br />Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <br /> <br />Nature of Ooerations <br /> <br />The Company is a non-profit. Colorado corporation which owns and <br />maintains water reservoir and distribution facilities. The Company <br />derives revenues from shareholder assessments, water storage and <br />recreation leases. The shareholders were assessed fees of $55 and $50 <br />per share in 1998 and 1997, respectively. <br /> <br />The controlling interest of the Company (68%) is owned by The Fort <br />Morgan Reservoir and Irrigation Company, The Fort Morgan Reservoir and <br />Irrigation Company is also a non-profit, Colorado corporation. The <br />entities are homogeneous in operation of the total .water supply and <br />irrigation system. <br /> <br />A minority interest of the Company (.8%) is owned by The Fort Morgan <br />Water Company, Ltd., a limited partnership engaged in purchasing, <br />management and leasing of water rights. <br /> <br />All of these entities have several common directors as well as <br />arrangements for sharing office space, personnel and expenses. <br /> <br />Basis of Accountina <br /> <br />The Company utilizes the accrual basis of accounting. The financial <br />statements of the Company have been prepared in conformity with <br />generally accepted accounting principles. Although the Company is a <br />non-profit Company, it does not meet the definition of a not-for-profit <br />organization as defined in Statement of Financial Accounting Standards <br />(SFAS) No. 116 and therefore does not follow the Not-For-Profit Audit <br />and Accounting Guide. For purposes of the statement of cash flows, the <br />Company considers all investments purchased with an original maturity <br />of three months or less to be cash equivalents. The preparation of <br />financial statements in conformity with generally accepted accounting <br />principles requires management to make estimates and assumptions that <br />affect certain reported amounts and disclosures, Accordingly, actual <br />results could differ from those estimates. <br /> <br />Receivables <br /> <br />The Company considers all accounts to be collectible and has not <br />recorded an allowance for uncollectible accounts. <br /> <br />pronertv and Eauinment <br /> <br />Equipment, land and improvements are recorded at cost .and est~ated <br />cost. Equipment depreciation is computed using the straight-line <br />method with estimated useful lives of 3 to 10 years. <br /> <br />-5- <br />