athens tn acfr fy2025

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CITY OF ATHENS, TENNESSEE
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2025
A - 23
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Basic Financial Statements, Presentation, Basis of Accounting and Measurement Focus 
(Continued)
The statement of activities demonstrates the degree to which the direct expenses of a given 
function or activity are offset by program revenues. Direct expenses are those that are clearly 
identifiable with a specific function or activity. The City does not allocate indirect expenses to 
functions or activities in the statement of activities. Program revenues include: (1) charges to 
individuals who purchase, use or directly benefit from goods, services, or privileges provided by 
a given function, and (2) grants and contributions that are restricted to meeting the operational or 
capital requirements of a particular function or activity. Taxes and other items not considered 
program revenues are reported as general revenues. When both restricted and unrestricted 
resources are available for use, the City's policy is to use restricted resources first.
Fund Financial Statements
Fund financial statements of the reporting entity are organized into funds, each of which are
considered to be separate accounting entities. Each fund is accounted for by providing a separate 
set of self-balancing accounts, which constitute its assets, deferred outflows, liabilities, deferred 
inflows, equity, revenues, and expenditures/expenses.
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government-wide financial
statements. Major individual governmental funds and major individual proprietary funds are
reported as separate columns in the fund financial statements.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Available means collectible within the current
period or soon enough thereafter to be used to pay liabilities of the current period. For this
purpose, the City considers revenues to be available if they are collected within sixty days of the
end of the current fiscal period.
Expenditures are recorded when the related fund liability is incurred, except for unmatured
interest on long-term debt, claims, judgments, compensated absences, and pension expenditures,
which are recorded as a fund liability when expected to be paid with expendable available
financial resources.
Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are 
all considered to be susceptible to accrual and so have been recognized as revenues of the current 
fiscal period. All other revenue items are considered to be measurable and available only when 
cash is received by the government.
(Continued)