08-14-1991 Council Agenda - Laserfiche WebLink

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1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 LITTLE CANADA FIREMENS RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS December 31, 1990 Page 1 of 8 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the Little Canada Firemen's Relief Association conform to generally accepted accounting principles applicable to governmental units. The following is a summary of the significant accounting policies. FORM OF GOVERNMENT The Little Canada Firemen's Relief Association was incorporated on January 5, 1961. It operates under the provisions of Minnesota Laws 1951 Chapter 550, Minnesota Statutes Section 317, as amended. It is governed by a board of ten members. Six of the board members are elected by the members of the Association and three are appointed by the City as members of the board. The fue chief is the automatic tenth member of the Board. FINANCIAL REPORTING ENTITY In accordance with the Codification of Govemmental Accounting and Financial Reporting Standards (GASB) Section 2100, "Defining the Reporting Entity ", for financial reporting purposes the Relief Association's financial statements include all funds, account groups, boards and commissions over which the Board of Directors exercise oversight responsibility. Oversight responsibility includes appointment of governing bodies, budget authority, approval of tax levies and responsibility for funding deficits. FUND DEFINITIONS General Fund - accounts for the Special Deferred Compensation Account (S.D.C.A.) and all financial resources except those required to be accounted for in the Special Fund. Special Fund (Pension Trust)- accounts for financial resources to be used exclusively for the payment and administration of the Little Canada Firemen's Pension and Disability Relief. BASIS OF ACCOUNTING General Fund - The modified accrual basis of accounting is followed for the General Fund of the Association. Under this method of accounting, revenues are recognized when received in cash, except for revenues of a material amount that have not been received at the normal time of receipt and revenues susceptible to accrual. Revenues considered susceptible to accrual are those revenues that are both measurable and available to finance the Association's operations during the year. Expenditures are reported when the related liability is incurred. Special Fund (Pension Trust) - The accrual basis of accounting is followed for the Pension Trust Fund of the Association. Under this method, revenues are recognized in the accounting period in which they are earned and become measurable. Expenses are recognized in the period incurred, if measurable, except for future pension costs which are computed periodically in accordance with State requirements. INVESTMENTS Investments are stated at amortized cost plus interest and any dividend added to date. Page 67