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12 CITY OF ST. ANTHONY, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1979 Note 1 - Summary of Significant Accounting Policies The accounting policies of the City of St. Anthony conform to generally accepted accounting principles, except as explained in Note 2. The following is a summary of the significant policies. Basis of accounting: Governmental -type funds - Revenue and expenditures are recognized on the modified accrual basis. Under the modified accrual basis, revenue is recognized in the accounting period in which it becomes available and measurable. Expenditures are recognized in the accounting period in which the fund incurred the liability, if measurable, except for unmatured interest on general long-term debt and special assessment debt. Proprietary -type funds - Income and expenses are recognized on the accrual basis. Under the accrual basis, income is recognized in the accounting period in which it is earned and becomes measurable; expenses are recognized in the period incurred, if measurable. The following transactions are accounted for as described below: General property taxes - Revenue is recognized in the year of anticipated collection, with amounts due from the County and received early in the following year set up as a receivable (unremitted taxes). Allowances are provided for the full amount of delinquent taxes receivable. This procedure has the effect of recognizing general property taxes as revenue when cash is received because of the uncertainty of collection of the delinquent amount. Interest revenue on special assessments receivable - Interest revenue is recognized in the year of anticipated collection of the current principal installment. Interest expense on general bonded indebtedness and special assess- ment bonds - Interest expense is recorded as an expenditure when paid; interest is not accrued unless fully matured and not paid. Bond and interest payments due January 1 - Expenditures are recognized when amounts are remitted to the paying agent (usually in December) for payment of bonds and interest. Cash and temporary investments - Cash available, in excess of immediate needs, is invested temporarily in savings accounts, certificates of deposit and short-term government obligations. Interest income is recognized as received in the Investment Fund. Interest earnings are allocated to the other City funds on the basis of average cash balances. Investments are stated at cost, which approximates market.