Page 77 - 2018 Comprehensive Annual Financial Report - City of Winston-Salem

Restricted Cash June 30, 2018

Business-type activities
Water and sewer utility
Unexpended bond proceeds $ 35,195,218
Equipment and replacement reserves 46,031,809
Economic development 3,000,000
Solid waste disposal
Land ll closure and postclosure costs 18,511,991
Public assembly facilities management
Capital reserve 81,921
Total business-type activities 102,820,939
Total restricted cash $ 102,820,939

5. Inventories
Inventories are recognized under the consumption method of accounting, which recognizes expenditures or expenses of operating
materials and supplies as goods are used. Inventories are stated at average cost for warehouse, eet services, Transit Authority and water
and sewer funds. All other inventories are stated at lower of cost ( rst in, rst out) or market.

6. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (i.e. roads, bridges, sidewalks, and similar items) are
reported in the applicable governmental or business-type activities columns in the government-wide statements. Equipment purchases
are considered capital assets when the individual cost is equal to or greater than $5,000 and useful life is in excess of two years. Donated
capital assets received prior to July 1, 2015 are recorded at their estimated fair value at the date of the donation. Donated capital assets
received after July 1, 2015 are recorded at acquisition value. All other purchased or constructed capital assets are reported at cost or
estimated historical cost. General infrastructure assets acquired prior to July 1, 2003, consist of road network and water and sewer system
assets. These assets are reported at historical cost. The cost 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 are capitalized as projects are constructed. Net interest on debt issued
to nance capital assets of business-type activities is capitalized during the construction phase.

Property, plant, and equipment of the City and component units is depreciated using the straight line method over the following
estimated useful lives:
Buildings 10-40 years
Improvements other than buildings 10-40 years
Machinery and equipment 3-12 years
Computer software 5-8 years

7. Deferred Out ows/In ows of Resources
In addition to assets, the statement of net position will sometimes report a separate section for deferred out ows of resources. This
separate nancial statement element, deferred out ows of resources, represents a consumption of net position that applies to a future
period and so will not be recognized as an expense or expenditure until then. The City has several items that meet this criterion, pension
deferrals, contributions made to the pension plan in the 2018 scal year, deferred charge on refunding and derivative instrument in the
government-wide statement of net position. A deferred charge on refunding results from the di erence in the carrying value of refunded
debt and its reacquisition price.
In addition to liabilities, the statement of net position will sometimes report a separate section for deferred in ows of resources. This
separate nancial statement element, deferred in ows of resources, represents an acquisition of net position that applies to a future
period and so will not be recognized as revenue until then. The City has several items that meet this criterion, deferrals of pension expense
that result from the implementation of GASB Statement 68 and GASB Statement 71, deferrals of OPEB expense that result from the
implementation of GASB Statement 75, deferred charge on refunding, and advances from other governments in the government-wide
statement of net position. A deferred charge on refunding results from the di erence in the carrying value of refunded debt and its
reacquisition price. The derivative instrument is a change in fair value associated with an e ective hedge. The advances from other
governments are grants received in advance of meeting the GASB 33 timing requirements in governmental funds. The governmental
funds also report unavailable revenues from taxes, leases, and assessments.

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