Page 35 - BAA CAFR 2017

BIRMINGHAM AIRPORT AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

B. Use of Accounting Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

C. Investments
State statutes authorize the Authority to invest in U.S. government
obligations or in bonds of the State of Alabama or in any county or
municipality therein, or in certificates of deposit collaterally secured by a
pledge of U.S. government obligations.

Investments are accounted for in accordance with GASB Statement No. 72,
Fair Value Measurement and Application, which requires that certain
investments be recorded at fair value (e.g. quoted market prices).

D. Restricted Assets
Funds are set aside as restricted and they are not available for current
expenses when constraints placed on their use are legally enforceable due
to either:

 Externally imposed requirements by creditors (such as through debt
covenants), grantors or contributors;
 Laws or regulations of other governments.

E. Designated Assets
The Authority’s management designates funds for capital projects, debt
service and other specific commitments; these funds would otherwise be
available for operations.

F. Inventory
Inventories consist of the following as of June 30,

2017 2016
Baggage Handling System Parts $ 179,144 $ 149,564
Jet Bridge Parts 113,620 99,785
Total $ 292,764 $ 249,349

Inventory is valued at the lower of cost or replacement value. The cost is
determined on a first in, first out basis.

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