07-10-1995 Council Packet - Laserfiche WebLink

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n CITY OF ORONO. MINNESOTA Notes to Financial Statements (continued) December 31, 1994 NOTE I - SIGNinCANT ACCOUNTING POLICIES (CONTINUED) i.Revalue Recognition - Revxnue is recognized when it becomes measurable and available. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period cr soon enough thereafter to be used to pay liabilities of the current period. Major revenue that is susceptible to accrual includes propeny taxes, special 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 mn measurable until collected. 2.Recording of Expenditures - Expenditures 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 reci'gnized when due. Proprietary Funds are accounted for using the accrual basis of accounting. Under this methtHl. revenues are recognized when earned and expen.ses are recognized when they are incurred. The City applies all applicable pronouncements of the Financial Accounting Standards Board 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 alliKated to the respective funds on the basis of applicable cash balance participation by each fund. Cash and investments held by trustee include balances held in segregated accounts that are established for the deferred compensation plan payable to employees. Certain proceeds of the 1991 Public Facilities Revenue Bond and the Enterpri.se Fund Revenue Bonds, as well as certain res(,v.rces set aside, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Investments are stated at cost. Assets held by deferred compensation trustees are carried at market value. F.Property Taxes Property tax levies are set up by the City Council in October of each year, and are certified to Hennepin County for c»)Ilection in the following year. In Minnesota, counties act as collection agents for all property taxes. A portion of the propeny taxes levied is paid by the State of Minnesota ‘hrough Homestead and Agricultural Credit Aid (HACA), which is included in intergovernmental revenue in the financial statements. -33- I I I J