C.A.F.R., FY 2011-12 - Laserfiche WebLink

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City of Paris, Texas Notes to Financial Statements September 30, 2012 L Summar�of Significant Accounting Policies (Continued) D. Assets, Liabilities and Equity (Continued) 8. Fund Equity It is the City's practice to first use restricted fund balance prior to the use of unrestricted fund balance when an expense is incurred for purposes for which both restricted and unrestricted fund balance are available. The City's practice for the use of unrestricted fund balance amounts require that committed amounts would be reduced first, followed by assigned amounts and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those restricted fund balance classifications could be used. Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The government itself can establish limitations on the use of resources through either a commitment or an assignment. The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision- making authority. Once adopted, the limitation imposed by the ordinance remains in place until a similar action is taken to remove or revise the limitation. Amounts in the assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as committed. The governing council allows the finance director to assign fund balance. Unlike commitments, assignments generally only exist temporarily. II. Reconciliation of Government-wide and Fund Financial Statements A. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Assets The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net position — governmental activities as reported in the government-wide statement of net assets. One element of that reconciliation explains that "capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds." The details ofthis $38,282,953 are as follows: Land Construction in Progress Buildings Less: Accumulated Depreciation - Buildings Improvements Other Than Buildings Less: Accumulated Depreciation - Improvements Other Than Buildings Machinery and Equipment Less: Accumulated Depreciation - Machinery and Equipment Infrastructure Less: Accumulated Depreciation - Infrastructure Net Adjustment to Increase Fund Balance - Total Governmental Funds to Arrive at Net Position - Governmental Activities 32 $ 5,912,108 607,529 14,601,581 (4,885,493) 7,860,657 (2,322,919) 19,654,343 (16,403,914) 39,025,955 (25,766,894) $ 38,282,953