Laserfiche WebLink
CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2008 <br />Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />M. COMPENSATED ABSENCES <br />It is the City's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. <br />All vacation pay and the portion of sick pay allowable as severance pay is accrued as incurred in the <br />government -wide and proprietary fund fmancial statements. The current portion is calculated based on <br />historical trends. <br />N. LONG -TERM OBLIGATIONS <br />In the entity-wide financial statements, long -term debt and other long -term obligations are reported as <br />liabilities in the applicable governmental activities. Bond premiums and discounts are deferred and <br />amortized over the life of the bonds using the straight -line method. Bond issue costs, if material, are <br />amortized over the term of the related debt using the straight -line method. <br />In the governmental fund financial statements, bond premiums and discounts, as well as bond issue costs are <br />recognized during the current period. The face amount of the debt issue is reported as other financing <br />sources. Premiums received on debt issuances are reported as other fmancing sources while discounts are <br />reported as other financing uses. Issue costs are reported as debt service expenditures. <br />O. FUND EQUITY <br />In the governmental fund financial statements, reservations of fund balance represent those portions of fund <br />equity not appropriable for expenditure or legally restricted by outside parties for use for a specific purpose. <br />Designated fund balances represent tentative plans for future use of fmancial resources that are subject to <br />change. <br />P. INTERFUND TRANSACTIONS <br />Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions <br />that constitute reimbursements to a fund for expenditures /expenses initially made from it that are properly <br />applicable to another fund, are recorded as expenditures /expenses in the reimbursing fund and as reductions <br />of expenditures or expenses in the fund that is reimbursed. All other interfund transactions are reported as <br />transfers. <br />All Interfund transactions are eliminated except for activity between governmental activities and business - <br />type activities for presentation in the entity-wide statements of net assets and statements of activities. <br />Q. RECENTLY ISSUED ACCOUNTING STANDARDS <br />Statement No. 51 Accounting and Financial Reporting for Intangible Assets. The provisions of this <br />Statement are effective for periods beginning after June 15, 2009. GASB 51 addresses the recognition of <br />intangible assets, including easements, water rights, timber rights, patents, trademarks, and computer <br />software. Additionally, it establishes a specified- conditions approach to recognizing intangible assets that <br />are internally generated. GASB 51 provides guidance on determining the useful life of intangible assets <br />when contractual or legal provisions limit the length of their life. This statement is effective for periods <br />beginning after June 15, 2009 and the provisions of this statement are generally required to be applied <br />prospectively beginning in fiscal year 2010 and thereafter. <br />41 <br />