2015 Financial Annual Report

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS City of Surrey

For the year ended December 31, 2015 [tabular amounts in thousands of dollars]

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) a) Basis of consolidation (continued) v) Surrey Homelessness and Housing Society

The consolidated financial statements include the assets, liabilities, revenues and expenses of Surrey Homelessness and Housing Society (“SHHS”). All inter-departmental and inter-entity accounts and transactions between SHHS and the City are eliminated upon consolidation. The City provided seed money to the Surrey Homelessness and Housing Society and oversees its operations. vi) Trust Funds These funds account for assets which must be administered as directed by agreement or statute for certain beneficiaries. In accordance with PSAB recommendations on financial statement presentation for local governments, trust funds are not included in the City’s consolidated financial statements. Trust funds administered by the City are presented in note 19. b) Revenue recognition Revenues are recognized in the period in which the transaction or event occurs that give rise to the revenues. All revenues are recorded on an accrual basis, except when the amounts cannot be determined with a reasonable degree of certainty or when their estimation is impractical. The City is required to act as the agent for the collection of certain taxes and fees imposed by other authorities. Collections for other authorities are excluded from the City’s taxation revenues. Revenue recognition on sales of properties occurs when the City has transferred the significant risks and rewards of ownership. Property lease revenue includes all amounts earned from tenants, including property tax and operating cost recoveries. Lease revenues are recognized on a straight-line basis over the term of the lease. Consulting revenue is recorded at the time when services are provided. Restricted transfers from governments are deferred and recognized as revenue in the period the stipulations in the related agreement are met. Unrestricted transfers are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. c) Deferred revenue The City defers the portion of the revenue collected from permits, licenses and other fees relating to services not yet rendered. This revenue is recognized in the year in which related inspections are performed or other related services are provided. d) Investment income Investment income is reported as revenue in the period earned. e) Expenses Expenses are recognized as they are incurred and measurable as a result of receipt of goods or services and/or the creation of a legal obligation to pay. Interest expense is accrued as incurred. f) Properties held-for-sale Properties held for sale include real estate properties which are ready and available to be sold and for which there is an available market. They are valued at the lower of cost or expected net realizable value. No amortization is recorded for properties held-for- sale. Properties held-for-sale is presented in note 5.

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