Page 66 - 65859_Cover-V3 (2).pdf

HUDSON CITY SCHOOL DISTRICT
SUMMIT COUNTY, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2015

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

The District applies restricted resources first when an expense is incurred for purposes for which both
restricted and unrestricted net position is available.

N. Estimates

The preparation of the basic financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the amounts reported in the basic financial statements and
accompanying notes. Actual results may differ from those estimates.

O. Interfund Activity

Exchange transactions between funds are reported as revenues in the seller funds and as
expenditures/expenses in the purchaser funds. Flows of cash or goods from one fund to another
without a requirement for repayment are reported as interfund transfers. Interfund transfers are
reported as other financing sources/uses in governmental funds and after nonoperating
revenues/expenses in the proprietary funds. Repayments from funds responsible for particular
expenditures/expenses to the funds that initially paid for them are not presented on the financial
statements. Transfers between governmental funds are eliminated for reporting on the government-
wide statement of activities.

P. Nonpublic Schools

Within the District boundaries, there are seven private or parochial schools which receive funding from
the State of Ohio through current State legislation. These monies are received and disbursed on behalf
of the private or parochial schools by the Treasurer of the District, as directed by the schools. The
fiduciary responsibility of the District for these monies is reflected in a special revenue fund (a
nonmajor governmental fund) for financial reporting purposes.

Q. Unamortized Bond Premiums and Deferred Charges on Debt Refunding

On the government-wide financial statements, bond premiums are deferred and amortized over the
term of the bonds using the straight-line method, which approximates the effective interest method.
Bond premiums are presented as an addition to the face amount of the bonds. On the governmental
fund financial statements, bond premiums are recognized in the current period.

For advance refundings resulting in the defeasance of debt, the difference between the reacquisition
price and the net carrying amount of the old debt is deferred and amortized as component of interest
expense. This accounting gain or loss is amortized over the remaining life of the old debt or the life of
the new debt, whichever is shorter and is presented as a deferred outflow of resources on the statement
of net position.

A reconciliation between the bonds face value and the amount reported on the statement of net position
is presented in Note 8.

F 46