Page 51 - City of Colleyville FY22 Adopted 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 and Debt Service Fund.

The budget basis for the Utility Fund and Drainage Utility Fund is the full
accrual basis. Under the full accrual basis of accounting, 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 (Annual Report) 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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