ACFR City of Paris 9-30-2024 with Continuing Disclosure Tables-searchable

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CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2024 L Summarof Significant Accounting Policies (Continued) G. 8. Subscription -Based Information Technology Arrangements (SBITA) (Continued) Key estimates and judgments related to SBITAs include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments. • The City uses the interest rate charged by the SBITA vendor as the discount rate. When the interest rate charged by the SBITA vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for SBITAs. • The subscription term includes the noncancellable period of the SBITA. • Subscription payments included in the measurement of the subscription liability are composed of fixed payments, variable payments fixed in substance or that depend on an index or a rate, termination penalties if the City is reasonably certain to exercise such options, subscription contract incentives receivable from the SBITA vendor, and any other payments that are reasonably certain of being required based on an assessment of all relevant factors. The City monitors changes in circumstances that would require a remeasurement of its SBITAs and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability. 9. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports a deferred outflow of resources related to pensions and OPEB. See footnote IV. F. and G. for further information. The City also reports a deferred outflow of resources related to an asset retirement obligation. See footnote IV. Q. for further information. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. The government has a deferred inflow of resources related to pensions and OPEB. See IV.F. and G. for further information. In addition, the government has one type of item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from the following sources: property taxes and street assessments. These amounts are deferred and recognized as an inflow of resources in the period that the amount becomes available. In addition, there are deferred amounts related to leases, that is initially an offset to lease receivable recorded at lease commencement, and is subsequently recognized as revenue over the life of the lease term. See footnote IV.L. for further information. 47