Page 46 - Colleyville FY21 Budget

BUDGETARY BASIS OF ACCOUNTING

Budgets of general governmental type funds are prepared on a modified
accrual basis. Under the modified accrual basis of accounting, revenues are
recognized when they are measurable (the amount of revenue can be
determined) and available (collectable within the current period and 60 days
thereafter for property and sales taxes). The following funds are general
governmental type funds and their budgets are prepared on that basis:
General Fund, Hotel Tax Fund, Crime Control and Prevention District Fund,
Colleyville Economic Development Fund, and Debt Service Fund.

The budget basis for the Utility Fund and Drainage Utility Fund is the full
accrual basis. Under this basis, revenues are recorded when earned and
expenses are recorded at the time they are incurred. For example, unbilled
charges for water and sewer usage are estimated and recorded.

Differences between the Basis of Accounting and Basis of Budgeting:

A Comprehensive Annual Financial Report (CAFR) is prepared by the City at
the end of a fiscal year. The basis of this report is "generally accepted
accounting principles" (GAAP). This report basically replicates the budget
presentation, with the following exceptions in both the Utility Fund and
Drainage Utility Fund:

 In these budgets, principal repayments of debt are classified as
expenses and in the CAFR they are classified are reductions of a
liability as required by GAAP.

 Also in the basis of budgeting in these budgets, the purchases of
capital equipment and capital improvements are budgeted as
expenses. Under the GAAP basis of accounting, these purchases are
classified as assets of the fund in the CAFR.

 Under the GAAP basis of accounting, depreciation expense on capital
equipment and capital improvements are recorded annually. This is
not recorded as an expense under the basis of budgeting because the
purchases of capital equipment and capital improvements are
budgeted as expenses in the year of acquisition.

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