1992 CAFR - Laserfiche WebLink

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CITY OF RAMSEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement Focus (continued) Public domain ( "infrastructure ") general fixed assets consisting of roads, bridges, curbs and gutters, streets and sidewalks, and drainage systems are excluded from general fixed assets as such items are immovable and of value only to the City. No depreciation has been provided on general fixed assets. Long -term liabilities expected to be financed from Governmental Funds are accounted for in the General Long -Term Debt Account Group and not in the Governmental Funds. The General Fixed Assets and General Long -Term Debt Account Groups are not funds and are concerned only with the measurement of financial position. They are not involved with measurement of results of operation. The Proprietary Funds are accounted for on a cost of services or capital maintenance measurement focus. This means that all assets, including fixed assets, and all liabilities, including long -term liabilities, associated with funds' activities are included on the balance sheet. The Proprietary Funds operating statement presents increases and decreases in net total assets. Fixed assets of the Proprietary Funds are recorded therein at historical cost. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the Proprietary Funds balance sheet. Depreciation has been provided over the estimated useful lives using the straight -line method. The estimated useful lives are as follows: Buildings and Improvements 50 Years Water and Sewer Lines 50 Years Mechanical (includes street lights) 20 Years Equipment 5 -10 Years Donated fixed assets are valued at the fair market value as of the date received. D. Basis of Accounting Basis of accounting refers to when revenue and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. Governmental Funds, Expendable Trust Funds, and Agency Funds are accounted for using the modified accrual basis of accounting. Governmental and Expendable Trust Fund revenue is recognized when it becomes measurable and available. 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, special assessments, intergovernmental revenue, charges for services, and interest earned on investments. Major 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.