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1 ! , j ~ City of Elk River <br />March 13, 2008 <br />~ Page 25 <br />1 L_~ ~.. <br />1 <br /> Votes to financial statements should include a reference ]inking the funded status disclosure in the notes to financial <br /> statements to the required schedule of funding progress in RSI. <br />1 i <br />ib <br />i <br />I <br />l <br /> max <br />mum contr <br />ut <br />on rates. <br />n <br />• If applicable, notes to financial statements should disclose legal or contractua <br /> addition, if relevant, they should disclose that the maximum contribution rates have not been explicitly taken into <br />1 consideration in the projection of pension benefits for financial accounting measurement purposes. <br /> • If an actuarial assumption is different for successive years, notes to fnalcial statements should disclose the initial <br />1 and ultimate rates. <br /> GASB Statement No. 51 -Accounting and Financial Re~ortingfor [ntangible Assets <br />' This statement was issued in June 2007 and is effective for periods beginning after June ] 5, 2009. <br /> The new standard characterizes an intangible asset as an asset that lacks physical substance, is nonfinancial in nature, and <br /> has an initial useful life extending beyond a single reporting period. Examples of intangible assets include easements, <br />1 computer sofhvare, water rights, timber rights, patents, and trademarks. <br /> This statement requires that intangible assets be classified as capital assets (except for those explicitly excluded from the <br />1 scope of the new standard, such as capital ]eases). Relevant authoritative guidance for capital assets should be applied to <br /> these intangible assets. 'The statement provides additional a tidance that specifically addresses the unique nature of <br /> intangible assets, including: <br />1 Requiring that alt intangible asset be recognized in the statement of net assets only if it is considered identifiable <br />' • Establishing aspecified-conditions approach to recognizing intangible assets chat are internally generated (for <br />example, patents and copyrights) <br /> • Providing guidance on reco~tizing internally generated computer software <br />1 <br /> • Establishing specific guidance for the amortization of intangible assets. <br />1 <br />1 <br /> <br /> <br />1 <br />x K ~ r x <br />This report is intended solely for the information and use of Council, management, and the Mimnesota Office of Che State Auditor <br />and is not intended and should not be used by anyone other than those specified parties. <br />Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting <br />records and related data. 'The comments and reeotxunendations in the report are purely constructive in nature, and should be read <br />in this context. <br />If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your <br />convenience. We wish to thank you for the continued opportunity to be of service and for the courtesy and cooperation extended <br />to us by your staff <br />March 13, 2008 <br />1 Minneapolis, Minnesota <br /> <br />9.12.835.9090 Fax 952.835.3261 <br />www.aemepas.com <br />(~~ ~, %Jt~I-., C ~~ <br />ABDO, EICK & MEYERS, LLP <br />Certifred Public Accountants <br />