Rock Valley College Comprehensive Annual Financial Report ...

ROCK VALLEY COLLEGE
ILLINOIS COMMUNITY COLLEGE DISTRICT NUMBER 511
NOTES TO FINANCIAL STATEMENTS (Continued)
Note 1 - Financial Reporting Entity, Measurement Focus, Basis of Accounting and Significant Accounting
Policies (Continued)
Accounting estimates: The preparation of the financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses, including
functional allocations during the reporting period. Actual results could differ from those estimates.
Cash equivalents: The College considers cash equivalents to be all demand deposits, Illinois Funds Money Market
Fund and Illinois School District Liquid Asset Fund Plus. Investments which have a purchased maturity greater than
90 days are not considered to be cash equivalents.
Investments: The College’s investments, with maturities less than one year when purchased and all certificates of
deposit, are reported at cost or amortized cost. Investments, with a maturity greater than one year at the time of
purchase, are recorded at fair value. Fair value is based on published fair values on June 30, 2008 and 2007.
Prepaid Items: Payments for goods and services that benefit future periods are recorded as prepaid items.
Restricted cash and cash equivalents and investments: Restricted cash and cash equivalents and investments are
restricted for the purpose of constructing and purchasing capital assets.
Capital assets: Capital assets include property, plant, equipment and infrastructure assets, such as roads and
sidewalks. Capital assets are defined by the College as assets with an initial unit cost of $5,000 or more and an
estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of
donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are
constructed.
Capital assets of the College are depreciated using the straight-line method over the following useful lives:
Assets
Years
Land improvements 10
Buildings 40
Building additions 20
Office equipment 3
Instructional equipment 3-5
Service equipment 5
Vehicles 3
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