2022 Annual Comprehensive Financial Report

8. Right to use assets

The City has recorded right to use lease assets as a result of implementing GASB 87. The right to use assets are initially measured at an amount equal to the initial measurement of the related lease liability plus any lease payments made prior to the lease term, less lease incentives, and plus ancillary charges necessary to place the lease into service. The right to use assets are amortized on a straight-line basis over the life of the related lease. 9. Deferred Outflows/Inflows of Resources and Unearned Revenues In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate statement of net position, Deferred Outflows of Resources , represents a consumption of net position that applies to a future period and so will not be recognized as an expense or expenditure until then. The City has several items that meet this criterion, an unamortized loss on bond defeasance for General Obligation and Water and Sewer Refunding bonds and pension and OPEB deferrals. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, Deferred Inflows of Resources, represents an acquisition of net position that applies to a future period and so will not be recognized as revenue until then. The City has certain items that meet the criterion for this category – prepaid taxes, prepaid assessments, deferrals of pension expense, leases and deferrals of Other Post Employment Benefit expense. In addition, revenue related to property tax, notes, and other accounts receivable that does not meet the availability criterion are reported in deferred inflows of resources in the governmental fund financial statements. The City reports unearned revenue on its government-wide and fund financial statements. Deferred Inflows for Grants arise when potential revenue does not meet both the “measureable” and “available” criteria for recognition in the current period (fund financial statements). Unearned revenues arise when resources are unearned by the City and received before it has a legal claim to them. In subsequent periods, when both revenue recognition criteria are met, or when the City has a legal claim to the resources, the liability for unearned revenue is removed from the applicable financial statement and revenue is recognized.

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