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CITY OF LITTLE CANADA, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2020 <br /> <br /> <br /> <br /> <br /> <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />D. Fund Financial Statement Presentation <br />Separate fund financial statements are provided for governmental and proprietary funds. Major <br />individual governmental and enterprise funds are reported as separate columns in the fund financial <br />statements. Aggregated information for the remaining nonmajor governmental funds is reported in <br />a single column in the fund financial statements. <br /> <br />Governmental fund financial statements are reported using the current financial resources <br />measurement focus and the modified accrual basis of accounting. Revenue is recognized when it <br />becomes measurable and available. “Measurable” means the amount of the transaction can be <br />determined and “available” means collectible within the current period or soon enough thereafter <br />to be used to pay liabilities of the current period. For this purpose, the City considers revenues to <br />be available if collected within 60 days after year-end. <br /> <br />Major revenue that is susceptible to accrual includes property taxes, intergovernmental revenue, <br />charges for services, and interest earned on investments. Only the portion of special assessments <br />receivable due within the current fiscal period is considered to be susceptible to accrual as revenue <br />of the current period. Revenue that is not susceptible to accrual includes licenses and permits, fees, <br />and miscellaneous revenue. Such revenue is recorded only when received because it is not <br />measurable until collected. Grants and similar items are recognized when all eligibility <br />requirements imposed by the provider have been met. <br /> <br />Expenditures are generally recorded when a liability is incurred, except for principal and interest <br />on long-term debt and compensated absences, which are recognized as expenditures to the extent <br />they have matured. Capital asset acquisitions are reported as capital outlay expenditures in the <br />governmental funds. Proceeds of long-term debt and acquisitions under capital leases are reported <br />as other financing sources. <br /> <br />Proprietary fund financial statements are reported using the economic resources measurement focus <br />and accrual basis of accounting, similar to the government-wide financial statements. Proprietary <br />funds distinguish operating revenues and expenses from nonoperating items. Operating revenues <br />and expenses generally result from providing services and producing and delivering goods in <br />connection with a proprietary fund’s principal ongoing operations. The principal operating <br />revenues of the City’s enterprise funds are charges to customers for sales and services. The <br />operating expenses for the enterprise funds include the cost of sales and services, administrative <br />expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition <br />are reported as nonoperating revenues and expenses. <br /> <br /> <br /> <br />50