Audit Report 12/31/1980 - Laserfiche WebLink

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CITY OF LINO LAKES NOTES TO FINANCIAL STATEMENTS December 31, 1980 Note 1: Summary of Significant Accounting Policies a. Basis of accounting - The financial statements were prepared on the modified accrual basis of accounting. Modifications in such method from the accrual basis follow: 1. Revenue are recorded as received in cash except for - - interest on special assessment levies which is recorded when due - revenue susceptible to accrual - revenue of a material amount that have not been received at the normal time of receipt - revenue received before they are earned 2. Expenditures are recorded on the accrual basis except for - - disbursements for inventory items which are considered expenditures at the time of purchase - interest on long -term debt which is recorded as an expenditure when due - disbursements for vacation pay, sick pay and severance pay which are recorded as expen- ditures when paid b. Temporary investments consist of certificates of deposit which are stated at cost, which approximates market value. Earnings on investments are allocated to the individual funds based on the average of month end clerk's balances during the year. c. Property, plant, and equipment of the Water and Sewer Enterprise Fund are stated at actual or estimated original cost. Depreciation is provided on the straight -line method at rates ranging from 2% to 20 %. Depreciation on contributed assets included in the Water and Sewer Fund is charged against contributed equity. General fixed assets as of December 31, 1975, were stated at actual cost or estimated replacement value. Additions since 1975 are stated at cost. The policy of stating such assets at other than cost is at variance with generally accepted accounting principles. Additions and deletions are not accounted for in detailed inventory records. 12 - 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1