AgdaPkt 2007-12-17 - Laserfiche WebLink

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NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES�CONTINUED� Governmental funds are reported using the current �nanclal resources measurement focus and the modl�ed accrual basis of accounting. Under this method, revenues are recognized when measurable and avallable. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within 60 days after year-end. The City's fiduciary funds are agency funds which use the accrual basis of accounting. However, since they are custodial in nature,they do not have a measurement focus. During fiscal year 2004/O5,the State of California changed the distribution method of the City's sales tax allocation under a program called the "Triple Flip." Under the "Triple Flip," 25% of the City's share of sales tax is now distributed from property tax receipts, with remittance of the sales tax to the City coinciding with the semiannual collection of property tax receipts from property owners in December and April. To recognize the sales tax revenue earned as of June 30, the City has changed its availability period for sales tax revenue from 60 days after year-end to seven months after year-end. The change in the availability period for sales tax will enable the City to accurately reflect sales tax earned in the reporting period. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expendltures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other�nancing sources Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Other revenues susceptible to accrual include other taxes, intergovernmental revenues, interest, and charges for services. Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements,the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net assets may be available to finance program expenditures. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary. Certain indirect costs are included in program expenses reported for individual functions and activities. The City follows Statements and Interpretations of the Financial Accounting Standards Board and its predecessors that were issued on or before November 30, 1989 in accounting for its business-type activities unless they conflict with Governmental Accounting Standards Board pronouncements. 32