6.2. SR 06-02-2014 - Laserfiche WebLink

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ELK RIVER FIRE RELIEF ASSOCIATION ELK RIVER,MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2013 AND 2012 Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS-CONTINUED C. Fund balance In the fund financial statements,fund balance is divided into four classifications based primarily on the extent to which the fire relief is bound to observe constraints imposed upon the use of resources reported in the governmental funds. These classifications are defined as follows: Nonspendable—Amounts that cannot be spent because they are not in spendable form such as prepaid items. Restricted Amounts related to externally imposed constraints established by creditors,grantors or contributors;or constraints imposed by state statutory provisions. Committed Amounts constrained for specific purposes that are internally imposed by formal action(resolution)of the Board of Directors(the Board),which is the fire relief s highest level of decision-making authority.Committed amounts cannot be used for any other purpose unless the Board modifies or rescinds the commitment by resolution. Assigned Amounts constrained for specific purposes that are internally imposed.In governmental funds other than the General fund,assigned fund balance represents all remaining amounts that are not classified as nonspendable and are neither restricted nor committed.In the General fund,assigned amounts represent intended uses established by the Board itself or by an official to which the governing body delegates the authority. Unassigned The residual classification for the General fund and also negative residual amounts in other funds. The Association considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available.Additionally,the fire relief would first use committed,then assigned,and lastly unassigned amounts of unrestricted fund balance when expenditures are made. D. Comparative data Comparative data for the prior year have been presented in the accompanying financial statements to provide an understanding of changes in the Association's financial position and operations. E. Income taxes The Organization is a nonprofit organization described in Section 501(c)4 of the Internal Revenue Code and is exempt from Federal and State income taxes. The Organization has analyzed filing positions with the Internal Revenue Service and the State of Minnesota.The Organization is subject to routine audits by these jurisdictions;however,the Organization is currently not under any audits for any tax periods.The Organization does not anticipate that any of its income tax filing positions would result in a material adverse effect on the Organization's financial condition,results of operations or cash flow.No liability has been recorded for uncertain tax positions. As allowed under accounting principles generally accepted in the United States of America,the Organization would accrue,if applicable,income tax related interest and penalties in income tax expense in the Organization's statement of revenues,expenditures and changes in fund balances.During the year ended December 31,2013,the Organization did not recognize any interest or penalties.With few exceptions,the Organization is no longer subject to tax examinations by tax authorities for years before 2010. -24-