Distrito Escolar del - Osceola County School District

Basis of Accounting
Basis of accounting refers to when revenues and expenditures, or expenses, are recognized in the
accounts and reported in the financial statements. Basis of accounting relates to the timing of the
measurements made, regardless of the measurement focus applied.
Government-wide financial statements are prepared using the accrual basis of accounting, as are the
proprietary funds and fiduciary funds financial statements. Revenues are recognized when earned
and expenses are recognized when a liability is incurred, regardless of the timing of the related cash
flows. Property taxes are recognized in the year for which they are levied. Revenues from grants,
entitlements, and donations are recognized in the fiscal year in which all eligibility requirements
imposed by the provider have been satisfied.
Governmental fund financial statements are prepared using the modified accrual basis of accounting.
Revenues, except for certain grant revenues, are recognized when they become measurable and
available. Revenues are considered to be available when they are collectible within the current period
or soon enough thereafter to pay liabilities of the current period. The District considers revenues to
be available if they are collected within 60 days of the end of the current fiscal year. When grant
terms provide that the expenditure of resources is the prime factor for determining eligibility for
Federal, State, and other grant resources, revenue is recognized at the time the expenditure is made.
Under the modified accrual basis of accounting, expenditures are generally recognized when the
related fund liability is incurred, except for principal and interest on long-term debt, claims and
judgments, other postemployment benefits, and compensated absences, which are recognized when
due. Allocations of cost, such as depreciation, are not recognized in governmental funds.
Proprietary Funds are accounted for as proprietary activities under standards issued by the Financial
Accounting Standards Board through November 1989 and applicable standards issued by the
Governmental Accounting Standards Board. Proprietary funds distinguish operating revenues and
expenses from nonoperating items. Operating revenues and expenses generally result from
providing services and producing and delivering goods in connection with the proprietary funds’
principal ongoing operations. The principal operating revenues of the District’s internal service
funds are charges for employee health insurance premiums and general and automobile liability
insurance premiums. Operating expenses include insurance claims and excess coverage premiums.
All revenues and expenses not meeting this definition are reported as nonoperating revenues and
expenses.
When both restricted and unrestricted resources are available for use, it is the District’s policy to use
restricted resources first, then unrestricted resources as they are needed. When both assigned and
unassigned resources are available for use, it is the District’s policy to use assigned resources first,
then unassigned resources as they are needed.
The charter schools, the Foundation for Osceola Education, Inc., and the Benefit Districts, are
accounted for as governmental organizations and follow the same accounting model as the District’s
governmental activities.
‣ Deposits and Investments
The District’s cash and cash equivalents are considered to be cash on hand, cash with fiscal agent,
demand deposits, and short-term, highly liquid investments with original maturities of three months
or less. Investments classified as cash equivalents include money market funds and amounts placed
with the State Board of Administration (SBA) in Florida PRIME, formerly known as the Local
Government Surplus Trust Fund Investment Pool.
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