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

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City of Paris, Texas Notes to Financial Statements September 30, 2011 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 Activity (Continued) allocated over their estimated useful lives and reported as depreciation expense." The details of this ($309,283) difference are as follows: Capital Outlay $ 2,490,252 Depreciation Expense (2,799,535) Net Adjustment to Increase Net Changes in Fund Balances - Total Governmental Funds to Arrive at Changes in Net Assets of Governmental Activities $ (309,283) 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 assets. Also, governmental funds report the effect of issuance costs, 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 $973,962 difference are as follows: Amortization of Issuance Costs $ (27,960) Amortization of Premiums 21,906 Principal Repayments 945,016 Net Adjustment of Increase Net Changes in Fund Balances - Total Governmental Funds to Arrive at Changes in Net Assets of Governmental Activities $ 938,962 III. Stewardship Compliance and Accountability Budgetary Information Annual budgets are legally adopted on a basis consistent with generally accepted accounting principles for all governmental funds except the capital projects funds, proprietary funds, and library trust funds. The budget for the capital projects funds is legally adopted for specific projects and may exceed one year. Formal budgetary integration is not employed for the proprietary funds. The City adopts an annual, informal budget as a financial plan for all proprietary funds. The library trust funds include non-budgeted financial activities, which are not subject to an appropriated budget and the appropriation process or to any legally authorized non-appropriated budget review and approval process. The community development block grant fund is not annually appropriated. At the close of each fiscal year, any unencumbered appropriation balance (appropriations including prior year encumbrances less current year expenditures and encumbrances) lapse or revert to the undesignated fund balance. 33