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CITY OF SUNNY ISLES BEACH, FLORIDA <br />NOTES TO FINANCIAL STATEMENTS <br />FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 <br />NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />G. LEASE RECEIVABLE <br />The City's lease receivable is measured at the present value of lease payments expected to <br />be received during the lease term. A deferred inflow of resources is recorded for the lease. <br />The deferred inflow of resources is recorded at the initiation of the lease in an amount equal <br />to the initial recording of the lease receivable. The deferred inflow of resources is amortized <br />on a straight-line basis over the term of the lease. <br />H. PREPAIDS <br />Certain payments to vendors reflect costs applicable to future accounting periods and are <br />recorded as prepaid items in both the government -wide and the fund financial statements. <br />The cost of prepaid items are recorded as expenditures/expenses when consumed rather <br />than when purchased. <br />L INVENTORY <br />All inventories are valued at cost. The costs of governmental fund -type inventories are <br />recorded as expenditures when purchased rather than when consumed. <br />J. INTERFUND RECEIVABLESAND PAYABLES <br />Activities between funds that are representative of lending/borrowing arrangements <br />outstanding at the end of the fiscal year are referred to as either "due to/from other funds" <br />(the current portion of interfund loans) or "advances to/from other funds" (the noncurrent <br />portions of interfund loans). Any residual balances outstanding between the governmental <br />activities and business activities are reported in the government -wide financial statements <br />as "internal balances." <br />K. CAPITAL ASSETS <br />Capital assets, which include property, land, equipment, infrastructure assets (e.g., roads, <br />bridges, sidewalks and similar items), intangible assets such as right -to -use assets (leases) <br />and subscription arrangements are reported in the applicable governmental or business -type <br />activities columns in the government -wide financial statements. Capital assets are defined <br />by the government as assets with an initial, individual cost of more than $5,000 and an <br />estimated useful life in excess of one year. Purchased or constructed assets are recorded at <br />historical cost or estimated historical cost if actual cost is not available. Donated capital <br />assets are recorded at acquisition value at the date of donation. <br />31 <br />