2006 CAFR Part 2 - Laserfiche WebLink

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COUNTY OF HAWAII Notes to the Basic Financial Statements June 30,2006 Operating Revenues and Expenses Revenues and expenses are distinguished between operating and nonoperating items for the proprietary funds. Operating revenues generally result from providing services in connection with the proprietary funds'principal ongoing operations. The principal operating revenues of the proprietary funds are fees charged to residents for rent and rental subsidies received from the federal government. Operating expenses include the costs associated with providing housing for tenants,such as utilities,lease rent,and maintenance and repairs;administrative expenses,and depreciation on capital assets. All revenues and expenses not meeting these definitions are reported as nonoperating revenues and expenses. Use of Estimates The preparation of the basic financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,as well as disclosure of contingent assets and liabilities at the date of the financial statements,and the reported amounts of revenues,expenditures,and other financing sources and uses during the reporting period. Actual results could differ from those estimates. Recently Adopted Governmental Accounting Pronouncements The County adopted GASB Statement No.42,Accounting and Financial Reporting for Impairment of Capital Assets for Insurance Recoveries,effective July 1,2005. This Statement establishes guidance for accounting and reporting for the impairment of capital assets and for insurance proceeds. GASB Statement No.42 did not have an impact on the County's basis financial statements for the fiscal year ended June 30,2006. The County adopted GASB Statement No.44,Economic Condition Reporting: The Statistical Section—an Amendment of National Council on Government Accounting(NCGA) Statement 1,effective July 1,2005. This statement improves the understandability and usefulness of statistical section information by addressing the comparability problems that have developed in practice and by adding information from the new financial reporting model for state and local governments required by GASB Statement No.34. GASB Statement No. 44 did not have an impact on the County's basic financial statements for the fiscal year ended June 30,2006,but required additional disclosures in the statistical section of the Comprehensive Annual Financial Report. The County adopted GASB Statement No.46,Net Assets Restricted by Enabling Legislation —an amendment of GASB Statement No. 34,effective July 1,2005. This statement clarifies that a legally enforceable enabling legislation restriction is one that a party external to the government—such as citizens,public interest groups,or the judiciary—can compel a -53 -