06-09-1997 Council Packet - Laserfiche WebLink

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CITY OF ORONO, MINNESOTA Notes to Financial Statements (continued) December 31. 1996 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 1. Revenue Recognition - Revenue is recognized when it becomes measuraMe and available. “Measurable” means the amount of the transaction can be determined and “available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Major revenue that is susceptible to accrual includes property taxes, rpecial assessments, intergovernmental revenue, charges for services, and interest earned on investments. Other revenue that is not susceptible to accrual includes licenses and permits, fees, and miscellaneous revenue. Such revenue is recorded only when received because it is not measurable until collected. 2. Recording of Expenditures - Expendimres are recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on general long-term debt which is recognized when due. Proprietary Funds are accounted for using the accrual basis of accounting. Under this method, revenues are recognized when earned and expenses are recognized when they are incurred. The City applies only those applicable pronouncements of the Financial Accounting Standards Board issued on or before November 30, 1989 in accounting and reporting for its proprietary operations. E. Cash and Investments Cash and temporary investments include balances from all funds that are combined and invested to the extent available in various securities authorized by state law. Earnings on pooled investments are allocated to the respective funds on the basis of applicable cash balance participation by each fund. Cash and investments held by trustee includes balances held in segregated accounts that are established for the deferred compensation plan payable to employees and also includes debt service funds held in a trust account a'' required by the 1991 Public Facilities Revenue Bond debt issue. Certain proceeds of the Enterprise Fund Revenue Bonds, as well as certain resources set aside, are classified as restricted assets on the balance sheet when their use is limited by bond covenant. Investments are stated at cost or amortized cost. Assets held by deferred compensation trustees are carried at market value. F. Property Taxes Propert)' tax levies are set up by the City Council in October of each year, and are cenified to Hennepin County for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. A portion of the property taxes levied is paid by the State of Minnesota through Homestead and Agricultural Credit Aid (HACA), which is included in intergovernmental revenue in the financial statements. -30- f| n 7 m II • t m1 If m If S it It w i ! n m 11 t ^ I