Balances of Governmental Funds to the Statement of Activities

Town of Prescott Valley, Arizona

Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities

For the Year Ended June 30, 2022

Net change in fund balances ‐ total governmental funds

Amounts reported for governmental activities in the statements of activities are different because: $ 15,442,462

Government funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation or amortization expense. Expenditures for capital assets Less amount not capitalized Less current year depreciation Less current year amortization Donations of capital assets are not reflected on the governmental fund statements but are shown in the statement of activities. 10,745,753 (1,184,294) (10,318,772) (16,740) (774,053)

2,740,708

Some expenses reported in the statement of activities, such as compensated absences, do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Compensated absences Accrued payroll Amortization of deferred bond premium cost Amortization of deferred charges on refunding Some revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 50,571 196,860 227,590 (95,868) 379,153

(492,149)

The issuance of long‐term debt provides current financial resources to governmental funds, while the repayment of the principal of long‐term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. In the current period, these amounts are: Financed purchase proceeds (3,033,000) Lease proceeds (61,432) Payment of lease payables 17,077 Principal payments on debt 7,009,585 3,932,230 Town pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension liability is measured a year before the Town's report date. Pension expense, which is the change in the net pension liability adjusted for changes in deferred outflows and inflows of resources related to pensions, is reported in the Statement of Activities. Pension contributions 3,814,283 Pension expense (1,330,202) 2,484,081 Certain revenues in the governmental funds that provide current financial resources are not included in the statement of activities because they were recognized in a prior period. However, other revenues that are deferred in the governmental funds, because they do not provide current financial resources due to unavailability, are recognized in the statement of activities. Special assessments Change in net position of governmental activities ‐ statement of activities (133,741)

$ 23,578,691

The notes to the financial statements are an integral part of this statement.