6.1. SR 06-03-2013 - Laserfiche WebLink

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i CITY OF ELK RIVER,MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31,2012 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED i In the fund financial statements,taxes that remain unpaid at December 31 are classified as delinquent taxes and are offset by a deferred inflow of resources for delinquent taxes not received within 60 days after year end. Deferred inflow of resources for taxes in governmental activities is susceptible to full accrual on the government-wide statements. Accounts Receivable Accounts receivable include amounts billed for services provided before year end. It is the City's policy to charge uncollectibles directly to operations as accounts become worthless. The Utilities has established a reserve for uncollectible accounts which is adjusted annually based on the receivable activity. No substantial losses from present receivable balances are anticipated. A summary of the Utilities'uncollectible account balances at December 31, 2012 and December 31,2011 is as follows: Increase 2012 2011 (Decrease) Electric $ 78,750 $ 78,750 $ - Water 26,250 26,250 - Total $ 105,000 $ 105.000 $ - Special Assessments Special assessments receivable include the following components: • Delinquent-includes amounts billed to property owners but not paid. • Unavailable-includes assessment installments that will be billed to property owners in future years. Special assessments represent the financing for public improvements paid for by benefiting property owners. These assessments are recorded as receivables upon certification to the County. In goverrmlental fund financial statements, special assessments are recognized as revenue when they are received in cash or within 60 days after year end. All governmental special assessments receivable not received within 60 days after year end are offset by a deferred inflow of resources in the governmental fund financial statements. At December 31,2012,the total delinquent special assessment receivable balance was$187,661. Notes Receivable The City received grant proceeds from the State of Minnesota to fund economic development projects. These funds have been loaned to several businesses and the terms of repayment vary with each loan. Notes receivable in the Revolving Loan fund is offset by a deferred inflow of resources. Deferred inflow of resources in governmental activities is susceptible to full accrual on the government-wide statements. 3. Inventories and Prepaid Items For the proprietary funds,inventories are valued at cost,which approximates market,using the first-in,first-out (FIFO)method. Inventories are recorded as an expense when sold or consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. 4. Restricted Assets The amounts in the restricted cash account are set aside in accordance with the issuing resolution for specific bond issues. They will be used for future debt service. 40