Title
Discussion of Impact on Updated Accounting and Financial Reporting Requirements for Certain Governmental Revenues
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Discuss the impact on the updated accounting and financial reporting requirements for certain governmental revenues.
Report
Issue:
Whether to discuss the impact on the updated accounting and financial reporting requirements for certain governmental revenues
Staff Contact:
Debbie Sullivan, Administrative Service Director, 360.753.8499
Nanci Lien, Fiscal Services Director, Administrative Services, 360.753.8465
Presenter(s):
Debbie Sullivan, Administrative Service Director
Background and Analysis:
The City of Olympia recognizes and records all revenue in compliance with Generally Accepted Accounting Principles (GAAP). There are two accounting methods used to record revenue - full accrual and modified accrual. Full accrual accounting means that the transaction is recognized when the revenue or expense is incurred, not when the cash enters or leaves the City. The accrual method is used for the Utility Enterprise funds.
Modified accrual is a governmental accounting method where revenue is recognized when it becomes "measurable and available." This is the method used for non-proprietary funds; primarily the General Fund and those funds supported by taxes. The industry standard for measurable and available is revenue received within 60 days of the end of the fiscal year. This means we can recognize taxes collected in November and December even though they are not received by the City until January and February of the following year. The rational is that the November and December taxes collected are "measurable" because we know the amount collected and "available" because they are received within 60 days of the end of year.
The State Auditor's Office has been conducting a state-wide initiative to ensure local governments are recording these ...
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