05 Audit for FY01-02 - Laserfiche WebLink

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City of Paris, Texas Notes to Financial Statements (Continued) Septenlber 30~ 2002 Summary of Significant Accounting Policies (Continued) C. Assets, Liabilities and Equity (Continued) 2. Receivables and Payables Transactions between funds that would be treated as revenues, expenditures, or expenses if the involved organizations were external to the governmental unit (quasi-external transactions) are accounted for as revenues, expenditures, or expenses in the funds involved. Transactions which constitute reimbursements to a fund for expendi- tures or expenses initially made from that fund which were properly applicable to another fund are recorded as expenditures or expenses in the reimbursing fund and as reductions of the expenditure or expense in the fund that is reimbursed. The City's ad valorem taxes are levied on October 1 and are due no later than January 31 of the following year. Taxes become delinquent February 1, after which time penalties and interest and, if not paid by July, attorney's collection fees are added. A tax lien attaches to property {real and personal) on January 1 of each year to secure the pay~nent of all taxes, penalties, and interest ultimately imposed on the property. The lien is effective until all such amounts are paid. Property tax revenues are recognized in the accounting period in which they become both measurable and available. Property tax revenues are considered measurable at the time of levy and are recognized as deferred revenue and taxes receivable, net of an allowance for estimated uncollectible taxes, at that time. Property tax revenues are considered available if collected within 60 days subsequent to year-end. 3. Inventories Inventories are stated at cost in the General Fund and at the lower of cost or market in the Water and Sewer Fund. Cost is determined on a first-in, first-out basis. In the General Fund, inventories are recorded as expenditures on acquisition and are fully reserved in the equity section. 4. Restricted Assets Certain proceeds of the City's enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. The Water Revenue Construc- tion Fund is used to report those proceeds of revenue bond issuances that are restricted for use in construction. The Revenue Bond 18