6.1. SR 06-03-2013 - Laserfiche WebLink

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ELK RIVER FIRE RELIEF ASSOCIATION ELK RIVER,MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2012 AND 2011 Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS A. Measurement focus,basis of accounting and basis of presentation Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting.Revenues are recognized as soon as they are both measurable and available.Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period.Revenues susceptible to accrual include contributions from the State of Minnesota and the City of Elk River and investment revenue,including interest on deposits and dividends.Expenditures generally are recorded when a liability is incurred,as under accrual accounting. The fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting.Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.Estimates also affect the reported amounts of revenue and expense during the reporting period.Actual results could differ from those estimates. B. Description of funds The resources of the Association are accounted for in two funds.Each fund is accounted for as an independent entity. Descriptions of the funds included in this report are: Major governmental funds: The General fund is a governmental fund that accounts for the resources not accounted for in other funds.It is used for the good and benefit of the Association as determined by Association bylaws.Its resources consist of fundraising proceeds,investment earnings,and miscellaneous sources. The Fiduciary fund accounts for assets held by the Association in a trustee capacity for its members. The Special Pension Trust fund is a special pension trust fund for the accumulation of resources to be used for retirement,dependency and disability annuity payments of appropriate amounts and at appropriate times in the future. Resources are contributed by the City at amounts determined by law(taxes),and from the two-percent insurance premium tax and amortization aid from the State of Minnesota. -27-