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ELK RIVER MUNICIPAL UTILITIES <br /> ELK RIVER,MINNESOTA <br /> NOTES TO FINANCIAL STATEMENTS <br /> DECEMBER 31,2012 AND 2011 <br /> Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED <br /> The Utilities may also invest idle funds as authorized by Minnesota statutes, as follows: <br /> 1. Direct obligations or obligations guaranteed by the United States or its agencies. <br /> 2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and <br /> received the highest credit rating, rated in one of the two highest rating categories by a statistical rating <br /> agency, and have a final maturity of thirteen months or less. <br /> 3. General obligations of a state or local government with taxing powers rated"A"or better; revenue <br /> obligations rated"AA"or better. <br /> 4. General obligations of the Minnesota Housing Finance Agency rated "A"or better. <br /> 5. Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System. <br /> 6. Commercial paper issued by United States banks corporations or their Canadian subsidiaries,of highest <br /> quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less. <br /> 7. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions <br /> qualified as a"depository"by the government entity, with banks that are members of the Federal Reserve <br /> System with capitalization exceeding$10,000,000, a primary reporting dealer in U.S.government <br /> securities to the Federal Reserve Bank of New York,or certain Minnesota securities broker-dealers. <br /> 8. Guaranteed investment contracts(GIC's) issued or guaranteed by a United States commercial bank, a <br /> domestic branch of a foreign bank, a United States insurance company,or its Canadian subsidiary, whose <br /> similar debt obligations were rated in one of the top two rating categories by a nationally recognized rating <br /> agency. <br /> Investments for the Utilities are reported at fair value. <br /> Accounts receivable <br /> Accounts receivable include amounts billed for services provided before year end. The Utilities has established a <br /> reserve for uncollectible accounts which is adjusted annually based on the receivable activity. No substantial losses <br /> from present receivable balances are anticipated. A summary of the uncollectible account balances at <br /> December 31, 2012 and December 31,2011 is as follows: <br /> Increase <br /> 2012 2011 (Decrease) <br /> Electric $ 109,845 $ 78,750 $ 31,095 <br /> Water 26,250 26,250 - <br /> Total $ 136,095 $ 105,000 $ 31,095 <br /> 33 <br />