City of Surrey's Annual Financial Report 2021

NOTESTOTHE CONSOLIDATED CITY OF SURREY FINANCIAL STATEMENTS

For the year ended December 31, 2021 [tabular amounts in thousands of dollars]

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

h) Collection on behalf of other authorities 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. Development cost charges Development cost charges are recorded as deferred revenue at the time they are received as there is a future obligation to be fulfilled. When qualifying development expenditures are incurred, they are recognized into revenue. Developer contributions Tangible capital assets are contributed by developers as a condition of the development approval process. The timing of delivery of tangible capital assets is dependent upon the developer. Tangible capital assets received as contributions are recorded at their estimated fair value at the date of receipt and as developer contributions revenue. i) j) Deferred revenue The City defers the portion of the funds collected from permits, licenses and other fees relating to services not yet rendered. Revenue is recognized in the year in which related inspections are performed or other related services are provided. m) 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 using the effective interest method. n) Portfolio investments City investments with an original maturity date of more than three months are reported as portfolio investments and consist of short term investments, bonds and debentures, which are recorded at amortized cost. Discounts and premiums arising on the purchase of these investments are amortized over the term of the investments on an effective interest method. k) Investment income Investment income is reported as revenue in the period earned. l)

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