After closely monitoring today’s weather situation and consulting with other metro area jurisdictions, we have decided to proceed with normal operations on Monday, Dec. 16, with the following few exceptions:
The basis of accounting used for preparation of the County’s annual operating budget and CIP is different from the basis of accounting used to prepare the County’s annual audited financial statements.
The term “basis of accounting” is used to describe the timing of recognition for financial transactions—i.e., when the effects of transactions or events should be recognized. The basis of accounting used for purposes of financial reporting in accordance with GAAP is not necessarily the same basis used in preparing the annual operating budget document.
Basis of Accounting for Financial Statements
The modified accrual basis of accounting is used for governmental funds. Under this basis of accounting, revenues are recognized when the revenues are both measurable and available to finance expenditures of the current fiscal period. “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. Expenditures are generally recognized in the accounting period in which the fund liability is incurred, except for unmatured interest on general long-term debt, which is recognized when due.
The accrual basis of accounting is used for proprietary funds. Under this basis of accounting, revenues are recognized when earned and expenses are recognized when liabilities are incurred.
Basis of Accounting for Annual Operating Budget
The modified accrual basis of accounting is used for governmental funds, with the following exceptions:
The accrual basis of accounting is used for proprietary funds, with the following exceptions:
Open encumbrances for outstanding purchase orders do not lapse at the end of the fiscal year and continue as an obligation of the prior year budget.