ACFR FY 2022 FINAL BOOK - Flipbook - Page 77
City of Eustis, Florida
FINANCIAL SECTION
NOTES TO FINANCIAL STATEMENTS
Note 1 - Description of Funds and Summary of Significant Accounting Policies (Continued)
requirements, and any additional revenue (by bond covenant) is set aside as a restriction of net
position to be used for either further system expansion projects or principal repayment�
●
Interfund Transactions
Interfund services provided and used are accounted for as revenues, expenditures, or expenses�
Transactions that constitute reimbursements to a fund for expenditures/expenses initially made
from it that are adequately applicable to another fund are recorded as expenditures/ expenses in
the fund reimbursed� All interfund transactions are reported as transfers (see Note 13)�
●
Leases
Lessor: the City of Eustis is a lessor for several non cancellable leases of buildings and cell towers�
The City of Eustis recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental fund financial statements�
At the commencement of a lease, the City of Eustis initially measures the lease receivable at the
present value of payments expected to be received during the lease term� Subsequently, the lease
receivable is reduced by the principal portion of lease payments received� The deferred inflow
of resources is initially measured as the initial amount of the lease receivable, adjusted for lease
payments received at or before the lease commencement date� Subsequently, the deferred inflow
of resources is recognized as revenue over the life of the lease term�
Key estimates and judgements include how the City of Eustis determines (1) the discount rate it uses
to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts�
●
●
The City of Eustis uses its estimated incremental borrowing rate as the discount rate for leases�
The lease term includes the noncancellable period of the lease� Lease receipts included in the
measurement of the lease receivable is composed of fixed payments from the lessee�
The City of Eustis monitors changes in circumstances that would require a remeasurement of its
lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes
occur that are expected to significantly affect the amount of the lease receivable�
Annual Comprehensive Financial Report | September 30, 2022
77