City of Raleigh
Capital assets are depreciated using the straight line method over the following estimated useful lives:
Buildings and machinery
Water and sewer systems
Streets and sidewalks
Furniture & fixtures
6. Deferred outflows/inflows of resources
In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of
resources. This separate financial statement element, Deferred Outflows 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 three items that meet this criterion, unamortized bond refunding charges, contributions made to the
pension plan in the 2016 fiscal year and an accumulated decrease in the fair value of hedging derivatives for the
City’s interest rate swap agreements.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element, Deferred Inflows 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 multiple items that meet the criterion for this category ‐ prepaid taxes, loans receivable, assessments and
property taxes receivable and deferrals of pension expense that result from the implementation of GASB Statement
7. Earned vacation pay
It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is
no liability for unpaid accumulated sick leave since the City does not have a policy to pay any amounts when
employees separate from service. All vacation pay is accrued when incurred in the government‐wide and
proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they
have matured, for example, as a result of employee resignations and retirements.
8. Long‐term obligations
In the government‐wide financial statements, and proprietary fund types in the fund financial statements, long‐
term debt and other long‐term obligations are reported as liabilities in the applicable governmental activities, or
proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over
the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond
premium or discount.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as
bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing
sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt
issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt
proceeds received, are reported as debt expenditures.