25.1 - ACFR 9-30-2022 with Continuing Disclosure Tables

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CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2022 IL Reconciliation of Government -Wide and Fund Financial Statements (Continued) B. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government -Wide Statement of Activities (Continued) The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances — total governmental funds and changes in net position of governmental activities as reported in the government -wide statement of activities. One element of that reconciliation explains that "governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $55,056 difference are as follows: Capital Outlay $ 2,780,098 Depreciation Expense (2,835,154) Net Adjustment to Increase Net Changes in Fund Balances - Total Governmental Funds to Arrive at Changes in Net Position Of Governmental Activities (55.0561 Another element of that reconciliation states that "the net effect of various miscellaneous transactions involving capital assets (i.e., sales and donations) is to increase net position." The details of this $25,354 difference are as follows: In the statement of activities, only the gain on the sale of assets is reported. However, in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net position differs from the change in fund balance by the cost of the capital assets sold. $ (43,640) Donations of capital assets increase net position in the statement of activities, but do not appear in the governmental fund because they are not financial resources. 68,994 Total Governmental Funds to Arrive at Changes in Net Position of Governmental Activities $ 25,354 Another element of that reconciliation states that "the issuance of long-term debt (e.g. bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long- term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities." The details of this $1,366,148 difference are as follows: Initiation of Leases $ (278,821) Amortization of Premium 12,105 Principal Repayments 1,572,915 Lease Payments 59,949 Net Adjustment to Increase Net Changes in Fund Balances - Total Governmental Funds to Arrive at Changes in Net Position of Governmental Activities $ 1,366,148 42