2025 Annual Comprehensive Financial Report

CITY OF SHAKOPEE

NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2025

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position (Continued)

6. Capital Assets (Continued)

Assets

Years 50 30 25 4-20 10-40 20-75 4-40 30-75 10-25

Buildings Park Buildings

Building Improvements

Electrical Utility Distribution System Machinery and Equipment Water Utility Distribution System

Utility General Equipment

Fire Trucks Infrastructure

Lease Equipment Subscription-Based Information Technology Asset

shorter of useful life or subscription term shorter of useful life or lease term

7. Deferred Outflows/Inflows of Resources

In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until that time. The City has two items that qualify for reporting in this category. The City presents deferred outflows of resources on the Statement of Net Position for the deferred charge related to pensions and other postemployment benefit resources. The Commission has one item that qualifies related to pensions. Accordingly, the items, deferred pension resources and deferred other postemployment benefit resources, are reported only in the statement of net position. These items result from actuarial calculations and current year pension contributions and OPEB contributions made subsequent to the measurement dates. In addition to liabilities, the statement of financial position and fund financial statements will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The governmental funds report unavailable revenues from three sources: property taxes, special assessments, and intergovernmental revenue. The City recognizes a deferred lease receivable under both the modified accrual and full accrual basis. Resources received in advance is reported in both the governmental fund financial statements and within the government-wide financial statements. This item are reported for amounts that have been received before time requirements are met, but after all other eligibility requirements have been met. The Commission presents deferred inflows of resources related to pensions, leases receivable and regulatory collections.

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