COM 0770.000 2020-2022 - Laserfiche WebLink

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COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2021 Licenses and permits,charges for current services, fines and forfeitures,penalties and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually received. Real property taxes and State Revolving Fund loan proceeds are considered available when collected. In applying the susceptible to accrual concept to intergovernmental revenues,the legal and contractual requirements of the numerous individual programs are used as guidance. There are essentially two types of these revenues. In one,monies must be expended on the specific purpose or project before any amounts will be paid to the County;therefore,revenues are recognized based upon the expenditures recorded. Most construction grants and many operating grants fall into this category. In the other,monies are virtually unrestricted as to purpose of expenditure and are usually revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenues at the time of receipt or earlier if the susceptible to accrual criteria are met. The County reports deferred inflow of resources in its fund financial statements(see Note 7). Deferred inflows of resources arise when potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. In subsequent periods,when both revenue recognition criteria are met,the deferred inflow is removed from the fund financial statements and revenue is recognized. Expenditures are recognized under the modified accrual basis of accounting in the accounting period in which the fund liability is incurred. Exceptions to this general rule include: (a)accumulated compensated absences and claims and judgments which are recognized as expenditures when paid; (b)liabilities related to municipal solid waste landfill closure and postclosure care costs; (c)principal and interest on general long-term debt which are recognized as expenditures when due; and (d)liabilities relating to pollution remediation . The County applies all applicable GASB pronouncements,including the adoption of GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB (Financial Accounting Standards Board) and AICPA (American Institute of Certified Public Accountants)Pronouncements. Encumbrances The general, special revenue, and capital projects funds follow encumbrance accounting under which purchase orders,contracts and other commitments are recorded as an obligation of fund balance and provide authority for the carryover of appropriations to the subsequent year in order to complete these transactions. Encumbrances outstanding at year-end are included in the respective fund balance categories as appropriate and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year. - 52 -