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CITY OF LITTLE CANADA, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2015 <br /> <br /> <br /> <br />(39) <br /> <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />D. Change in Accounting Principle <br />During the fiscal year ended December 31, 2015, the City adopted GASB Statement <br />No. 68, Accounting and Financial Reporting for Pensions, and the related GASB <br />Statement No. 71, Pension Transition for Contributions Made Subsequent to the <br />Measurement Date-an Amendment of GASB Statement No. 68. The primary objective of <br />these Statements is to improve accounting and financial reporting by state and local <br />governments for pensions. They also improve information provided by state and local <br />governmental employers about financial support for pensions that is provided by other <br />entities. See Note 19 for more detail of the effect of this change. <br /> <br />E. Fund Financial Statement Presentation <br />Separate fund financial statements are provided for governmental, proprietary, and <br />fiduciary funds. Major individual governmental and enterprise funds are reported as <br />separate columns in the fund financial statements. Aggregated information for the <br />remaining non-major governmental funds is reported in a single column in the fund <br />financial statements. <br /> <br />Governmental fund financial statements are reported using the current financial <br />resources measurement focus and the modified accrual basis of accounting. Revenue is <br />recognized when it becomes measurable and available. "Measurable" means the <br />amount of the transaction can be determined and "available" means collectible within the <br />current period or soon enough thereafter to be used to pay liabilities of the current <br />period. For this purpose, the City considers revenues to be available if collected within <br />60 days after year-end. <br /> <br />Major revenue that is susceptible to accrual includes property taxes, intergovernmental <br />revenue, charges for services, and interest earned on investments. Only the portion of <br />special assessments receivable due within the current fiscal period is considered to be <br />susceptible to accrual as revenue of the current period. Revenue that is not susceptible <br />to accrual includes licenses and permits, fees, and miscellaneous revenue. Such <br />revenue is recorded only when received because it is not measurable until collected. <br />Grants and similar items are recognized when all eligibility requirements imposed by the <br />provider have been met. <br /> <br />Expenditures are generally recorded when a liability is incurred, except for principal and <br />interest on long-term debt and compensated absences, which are recognized as <br />expenditures to the extent they have matured. Capital asset acquisitions are reported as <br />capital outlay expenditures in the governmental funds. Proceeds of long-term debt and <br />acquisitions under capital leases are reported as other financing sources.