Page 17 - City of Bedford FY22 Budget

Basis of Budgeting

All gov e rnme nt al fu nd t y pe s, spe cial re v e nu e fu nds and age ncy fu nd t y pe s u se t he modi{ e d accru al basis of
accou nt ing. U nde r t he modi{ e d accru al basis of accou nt ing, re v e nu e s are re cognize d whe n su sce pt ible t o
accru al, i.e ., whe n t he y be come bot h me asu rable and av ailable . “Me asu rable ” me ans t hat t he amou nt of t he
t ransact ion can be de t e rmine d and “av ailable ” me ans colle ct ible wit hin t he cu rre nt pe riod or soon e nou gh
t he re aft e r t o be u se d t o pay liabilit ie s of t he cu rre nt pe riod. The C it y conside rs prope rt y t ax e s as av ailable if
t he y are colle ct e d wit hin 6 0 day s aft e r y e ar-e nd.

E x pe ndit u re s are re cognize d whe n t he re lat e d fu nd liabilit y is incu rre d. Principal and int e re st on ge ne ral long-
t e rm de bt are re corde d as fu nd liabilit ie s whe n du e or whe n amou nt s hav e be e n accu mu lat e d in t he De bt
Se rv ice Fu nd for pay me nt s t o be made e arly in t he following y e ar.

R e v e nu e s su sce pt ible t o accru al are prope rt y t ax e s, sale s t ax e s, franchise t ax e s, spe cial asse ssme nt s, int e re st
and charge s for se rv ice s. Fine s and pe rmit s are not su sce pt ible t o accru al be cau se ge ne rally t he y are not
me asu rable u nt il re ce iv e d in cash.

De fe rre d re v e nu e s arise whe n pot e nt ial re v e nu e doe s not me e t bot h t he “me asu rable ” and “av ailable ” crit e ria
for re cognit ion in t he cu rre nt pe riod. De fe rre d re v e nu e s also arise whe n t he C it y re ce iv e s re sou rce s be fore it
has a le gal claim t o t he m, as whe n grant monie s are re ce iv e d prior t o incu rring qu alify ing e x pe ndit u re s. In
su bse qu e nt pe riods, whe n bot h re v e nu e re cognit ion crit e ria are me t , or whe n t he C it y has a le gal claim t o t he
re sou rce s, t he liabilit y for de fe rre d re v e nu e is re mov e d from t he combine d balance she e t and re v e nu e is
re cognize d.

The accru al basis of accou nt ing is u t ilize d by proprie t ary t y pe fu nds, which inclu de t he Wat e r/Se we r Fu nd and
t he St ormwat e r Fu nd. U nde r t his me t hod, re v e nu e s are re cognize d whe n e arne d and e x pe nse s are
re cognize d at t he t ime t he liabilit ie s are incu rre d. The C it y 's policy is t o apply all Financial Accou nt ing St andards
Board st andards t o it s proprie t ary fu nds u nle ss t he y con| ict wit h Gov e rnme nt al Accou nt ing St andards Board
(GASB) gu idance .

City of Bedford, TX | Budget Book 2022 Page 17