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

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City of Paris, Texas Notes to Financial Statements September 30, 2012 II. 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) Another element of that reconciliation states that the "net effect of various miscellaneous transactions involving capital assets (e.g., donations and impairment) is to increase net assets." Donations of capital assets increase funds because they are not financial resources. An impairment of the former police station building decreases net assets but does not appear in the governmental funds because the impairment does not consume financial resources. The impairment loss is reported as a program expense in the public safety function/program in the statement of activities. The details of this $747,685 difference are as follows: Donated/Contributed Assets Impairment Net Adjustment to Increase Net Changes in Fund Balances - Total Governmental Funds to Anive at Changes in Net Assets of Governmental Activities $ 1,642,126 (894,441) $ 747,685 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 $1,075,230 difference are as follows: Amortization of Issuance Costs Amortization of Premiums Principal Repayments Net Adjustment to Increase Net Changes in Fund Balances - Total Governmental Funds to Arrive at Changes in Net Assets of Governmental Activities III. Stewardship Compliance and Accountability Budgetary Information $ (25,406) 20,436 1,080,200 $ 1,075,230 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 bud�;et 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 34