HomeMy WebLinkAboutInterest on Past Due Taxes Policy REPEALED
.
A~~~d
Interest on Past Due Taxes Policy
Background The Municipal Accounting and Reporting Manual, Province of Nova
Scotia, allows for the recognition of interest revenue on past due taxes to
be accounted for on the accrual basis or the cash basis, with note disclosure
in the financial statements. The pre-amalgamation unit recorded the
interest under both practices. The Cape Breton Regional Municipality has
maintained this accounting practice and budgeted on this basis.
With the implementation of SAP and current business practices, the
accounting treatment for the interest on past due taxes should be accounted
for entirely under the accrual basis. This will provide easier reconciliation
of the tax receivable sub-ledger to the general ledger control account on a
monthly and year-end basis.
The budgetary process for this interest revenue will not be effected as the
projections will reflect the past results and practices with any adjustments
for increase levels being accounted for through the valuation
allowance/reserve on the financial statements.
Recommendation
That the interest on past due taxes be recorded on the accrual basis with
any material budget variance accounted for through the valuation
allowance/reserve.
Approved by Council- February 24th/98