HomeMy WebLinkAboutNC Comprehensive Report (Finance) (32)CITY OF NATIONAL CITY
Notes to the Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
Fund Financial Statements
Governmental Funds Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a
Statement of Revenues, Expenditures and Changes in Fund Balances for all major
governmental funds and non -major funds aggregated. An accompanying schedule
is presented to reconcile and explain the differences in net assets as presented in
these statements to the net assets presented in the Government -Wide Financial
Statements. The City has presented all major funds that met the applicable
criteria.
All governmental funds are accounted for on a spending or "current financial
resources" measurement focus and the modified accrual basis of accounting.
Accordingly, only current assets and current liabilities are included on the
Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund
Balances presents increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Under the modified
accrual basis of accounting, revenues are recognized in the accounting period in
which they become both measurable and available to finance expenditures of the
current period.
Revenues are recorded when received in cash, except for that revenues subject to
accrual (generally 60 days after year-end) are recognized when due. The primary
revenue sources, which have been treated as susceptible to accrual by the City, are
property tax, sales tax, intergovernmental revenues and other taxes. Expenditures
are recorded in the accounting period in which the related fund liability is
incurred.
Deferred revenues arise when potential revenues do not meet both the
"measurable" and "available" criteria for recognition in the current period.
Deferred revenues also arise when the government receives resources before it
has a legal claim to them, as when grant monies are received prior to incurring
qualifying expenditures. In subsequent periods, when both revenue recognition
criteria are met or when the government has a legal claim to the resources, the
deferred revenue is removed and revenue is recognized.
The Reconciliation of the Fund Financial Statements to the Government -Wide
Financial Statements is provided to explain the differences created by the
integrated approach of GASB Statement No. 34.
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