Use of Estimates for Financial Reporting
July 1, 2009
Library management staff makes a number of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period in conformity with accounting principles generally accepted in the United States of America (GAAP). These estimates and assumptions are based on historical experience or other reasonable rationales and the actual results could differ from these estimates.
As an example: estimates are used in determining the Library’s allowance for doubtful accounts. This allowance will be used to reduce the total amount of accounts receivable on financial statements. The Library’s accounts receivable consists of fines and fees owed by library customers. In conformity with GAAP, the Library will record a reasonable estimate of the amounts that will not be collected.