2010 Annual Report - City of Vernon

THE CORPORATION OF THE CITY OF VERNONNotes to the Consolidated Financial StatementsYear Ended December 31, 20101. Significant Accounting Policies:a) Basis of Accounting:The consolidated financial statements of the City of Vernon are prepared by managementin accordance with local government accounting standards established by the PublicSector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants. Inline with the standards, the resources and operations of the City are segregated intovarious funds for accounting and financial reporting purposes, each being treated as aseparate entity with responsibility for the stewardship of the assets allocated to it. Theaccrual method for reporting revenues and expenses has been used unless otherwisestated.b) Basis of Consolidation:The consolidated statements include all funds of the City and the Wholly-OwnedSubsidiaries. Inter-fund revenues, expenses, assets, and liabilities have been eliminated.The following entities have been consolidated:Hesperia Development Corp. 100%CBW Development Corp. 100%c) Measurement Uncertainty:The preparation of financial statements in conformity with Canadian generally acceptedaccounting principles requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities at the date of the financial statementsand the reported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimates.d) Cash and Cash Equivalents:Management considers all highly liquid investments with maturity of three months or lessat acquisition to be cash equivalents.e) Revenue Recognition:All revenue is recognized on an accrual basis. Property taxes are recognized as revenuein the year it is levied. Utility charges are recognized as revenue in the quarterly periodearned.f) Expenses:Expenses are recorded in the period in which the goods or services are acquired and aliability is incurred.g) Non-Financial Assets:Non-financial assets are not available to discharge existing liabilities and are held for usein the provision of services. They are not intended for sale in the ordinary course ofPAGE 62CITY OF VERNON 2010 ANNUAL REPORT