C.A.F.R., FY 2010-11 - Laserfiche WebLink

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City of Paris, Texas Notes to Financial Statements September 30, 2011 Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting and Basis of Presentation (Continued) The City has the following fund types: Governmental Funds are used to account for the City's general government activities. Governmental fund types use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting revenues are recognized when susceptible to accrual (i.e., when they are "measurable and available"). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The City considers all revenues available if they are collected within 60 days after year- end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences and claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes, franchise taxes, licenses, interest, and special assessments are susceptible to accrual. Sales taxes are recognized as revenue in the period when the exchange transaction on which the tax is imposed occurs. Other receipts and taxes become measurable and available when cash is received by the City and are recognized as revenue at that time. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. The City reports the following major governmental funds: The General Fund is the primary operating fund of the City. It accounts for and reports all financial resources not accounted for in another fund. The Capital Projects Funds account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlay. The Debt Service Funds account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest. The City reports non-major governmental funds as Other Governmental Funds which include special revenue funds and a permanent fund. Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specific purposes other than for debt service or capital projects. The Permanent Fund is used to account for and report resources that are restricted to the extent that only earnings and not principal may be used. The City reports its Water and Sewer Enterprise Fund, a proprietary fund as a major fund. Proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The City applies all applicable Financial Accounting Standards Board pronouncements issued after November 30, 1989, in accounting and reporting for its proprietary operations. 28