Annual report of the Town of Hampton, New Hampshire

HAMPTON BEACH VILLAGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
General Fixed Asset Account Group
Property, plant and equipment acquired or constructed for general governmental services are recorded as
expenditures in the fund making the expenditure.
Funds used to acquire general fixed assets and/or debt service
payments on borrowing in connection therewith are accounted for as expenditures in the year payments are
made. This represents a departure from generally accepted accounting principles which require that fixed
assets be capitalized and accounted for in a separate fixed asset group of accounts.
Total Columns on Combined Statements - Overview
Total columns on the Combined Statements - Overview are captioned "Memorandum Only" to indicate that they
are presented only to facilitate financial analysis. Data in these columns do not present financial position, results
of operations, or changes in financial position in conformity with generally accepted accounting principles.
Neither
is such data comparable to a consolidation. Interfund elimination's have not been made in the aggregation of this data.
2. BUDGETS AND BUDGETARY ACCOUNTING
Significant General Budget Policies
The District follows a formal budgetary procedure in accordance with various legal requirements governing the
District's operations.
At an annual District meeting the District adopts a budget for the current year for the General Fund.
Project-length budgets are adopted for the Capital Projects Fund when major capital facility expenditures are
planned. The governing commissioners may transfer appropriations between exempt operating expenditures
as they deem necessary, but not between exempt and non-exempt categories. All annual budget appropriations
lapse at year end unless encumbered.
State statutes require annual balanced budgets but allow entities to use prior years unreserved fund balances
as revenues to balance the current years appropriations. For the year ended December 31, 1998, no such prior year
unreserved fund balances were applied for this purpose.
Encumbrances
Encumbrance accounting is used for the general fund and capital projects funds. Encumbrances are recorded when
purchase orders, contracts, and continuing appropriations are issued or voted, but are not considered expenditures
until liabilities for payments are incurred.
Encumbrances are reported as a reservation of fund balance on the balance
sheet. Encumbrances do not lapse at year end but are carried forward as a reserved balance until liquidated.