ACFR FY 2023 Final - Flipbook - Page 81
FINANCIAL SECTION
City of Eustis, Florida
NOTES TO FINANCIAL STATEMENTS
Note 1 - Description of Funds and Summary of Signiocant Accounting Policies (Continued)
Interfund services provided and used are accounted for as revenues, expenditures, or expensesÿ
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
reimbursedÿ All interfund transactions are reported as transfers (see Note 13)ÿ
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Leases
Lessor: the City of Eustis is a lessor for several non-cancellable leases of buildings and cell towersÿ
The City of Eustis recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental fund onancial 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 termÿ Subsequently, the lease
receivable is reduced by the principal portion of lease payments receivedÿ 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 dateÿ Subsequently, the deferred inflow
of resources is recognized as revenue over the life of the lease termÿ
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 receiptsÿ
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The City of Eustis uses its estimated incremental borrowing rate as the discount rate for leasesÿ
The lease term includes the non-cancellable period of the leaseÿ Lease receipts included in the
measurement of the lease receivable is composed of oxed 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 signiocantly affect the amount of the lease receivable.
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Annual Comprehensive Financial Report | September 30, 2023
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