Other Auditor Reports 12/31/2008

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New Accounting and Reporting Standards Accounting and Financial Reporting for Intangible Assets (GASB Statement No. 51) This statement is effective for periods beginning after June 15, 2009 and, therefore, is applicable to the City for the year ended December 31, 2010. The purpose of this statement is to eliminate the inconsistencies in accounting and reporting between governmental entities related to intangible items such as easements, rights, patents, trademarks, software, and donated assets. Fund Balance Reporting Changes (GASB Statement No. 54) In March 2009, the Governmental Accounting Standards Board GASB issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. The requirements of this Statement are effective for the fiscal year ending December 31, 2011. Earlier adoption and implementation is encouraged. Statement No. 54 distinguishes between fund balance amounts that are considered non -spendable, such as fund balance associated with inventories, and other amounts that are classified based on the relative ability to be spent. Beginning with the most non -spendable classification, fund balances will be reported in the following classifications: • Restricted—amounts constrained by external parties, constitutional provision, or enabling legislation. • Committed -includes amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision-making authority • Assigned—amounts a government intends to use for a particular purpose. In governmental funds other than the general fund, assigned fund balance represents the remaining amount that is not restricted or committed. • Unassigned—amounts that are not constrained at all will be reported in the general fund or to report deficit balances in other governmental funds. The new standard also clarifies the definitions of individual governmental fund types. The statement interprets certain terms within the definition of special revenue fund types, while further clarifying the debt service and capital projects fund type definitions. The statement also specifies how economic stabilization or "rainy -day" amounts should be reported as a component of fund balance in the general fund. Under GASB No. 54, it is no longer considered appropriate to include these types of funds as a special -revenue fund. For financial reporting purposes, stabilization should be regarded as a "restricted" or "committed" classification only if the city details the circumstances or conditions that signal the need for stabilization in sufficient detail. Otherwise, these amounts should be reported as "unassigned" in the general fund. (13)