Footnotes

We are happy to share the results of our continued efforts to improve the depth and breadth of our tax-backed offering. Effective this last month, we officially dropped the population threshold for inclusion to the standard data set to an even 40,000 for each of the three relevant sectors (City, County and School District). The effect of that movement yields an overall credit count increase of 36% for the year. Please look for this expanded dataset in your data update. To verify that your system has been appropriately updated, you may check under the [Help] button on the main menu and...

Category: CreditScope, Merritt Data

A government typically provides Government-Wide Financial Statements and Governmental Funds Financial Statements. The Government-Wide Financial Statements use the accrual basis of accounting while the Governmental Funds Financial Statements use the modified accrual accounting. Modified accrual basis of accounting measures the current financial resources available. It is basically a hybrid of accrual and cash basis of accounting. Fixed assets, such as property, plant and equipment, and long-term debt are not recognized in this accounting basis on the balance sheet because they are not...

Category: Accounting

Merritt currently classifies utility credits into the following sectors: Retail Electric, Water/Sewer, Wholesale Electric, Gas, and Solid Waste. Retail Electric, Water/Sewer, and Wholesale Electric are considered to be a part of the Merritt Standard Sector offering. Records for utility credits are created in CreditScope based upon the pledged revenues on outstanding debt - a straightforward process when only one source of revenue is pledged. As its name implies, a combined utility provides more than one type of utility service. When a combined utility credit is backed by more than one...

Category: CreditScope, Merritt Data

The Merritt data included in CreditScope is updated at the end of every business week. Most people are winding down their work weeks by Friday afternoon, but not at Merritt Research Services. "Our week is winding up on Friday afternoon," according to Troy Gerleman, Chief Operating Officer of Merritt Research Services. Merritt sends the updated data to Investortools for processing over the weekend. The updated data is then delivered electronically to clients typically during business hours on Monday. Most company's IT departments will then integrate the data update into the system so that...

Category: CreditScope, Merritt Data

Merritt Research Services has released its 2012 report on the timeliness of municipal audits, showing little change from prior years. This year's study, examined over 38,000 audits over the five-year period from 2007-2011, and over 8,000 audits for fiscal 2011 alone. While most analysts and investors continue to expect a six-month lag between the end of a borrower's fiscal year and the completion of its audit, the study shows a wide variance among sectors - and among individual issuers. The 2012 study revealed a median audit time of 145 days for fiscal year 2011, compared to 146 days for...

Category: Report, Merritt Data

Merritt Research Services has been working diligently to increase the breadth of our credit coverage in key tax-backed sectors. We are pleased to announce an expanded version of our database - including information for over 1,500 additional standard tax-backed credits. Please look for this expanded dataset in your data update from the week of August 27, 2012. To verify that your system has been appropriately updated, you may check under the [Help] button on the main menu and select [About CreditScope]. Look for a "Credit data date" of 08/24/2012 or later.

Category: CreditScope, Merritt Data

Prior to the amendments made in the Financial Accounting Standards Board (FASB) Accounting Standards Update No. 2010-23, Measuring Charity Care for Disclosure in August 2010, existing guidance did not prescribe a specific measurement basis for a health care entity to disclose charity care. Health care entities were required to disclose amounts related to their charity care policy, but the methodology for doing so was left up to each entity. Most often, this was a 'charges foregone for services and supplies' furnished under the entities' charity care policy. The charges foregone amounts...

Category: Accounting, Merritt Data

Merritt Research Services populates values in the Financial Data screen, which are then used to generate formulas and ratios designed to paint an accurate picture of a Credit's current financial condition. These calculations reflect liquidity, fiscal condition, working capital, leverage, coverage, and profitability. These formulas, ratios, and values that comprise them play an important role in credit analysis, but leave room for misinterpretation when considered out of context. The Notes contained within Audited Financial Statements often provide an abundance of information that may not be...

Category: CreditScope, Merritt Data

Simply put, accrual-based accounting recognizes revenues when earned and expenses when incurred. An entity may recognize revenues or expenses using an accrual-based accounting system even if cash has not yet been exchanged. In other words, the entity includes revenue earned once the service has been performed or the product has been shipped. The entity recognizes whatever expenses were incurred to earn those revenues even if it has not moved any cash to pay for those expenses. Government-Wide Financial Statements and Enterprise Funds follow the accrual-based accounting for entities...

Category: Accounting

Fund balance refers to the difference between assets and liabilities in the governmental funds balance sheet. This information is one of the most widely used elements of state and local government financial statements. Users of financial statements examine fund balance information for a variety of reasons such as identifying the available resources that can be used to repay long-term debt, or determining whether a government has the necessary resources to pay for new programs, or the continuance or expansion of existing programs. Fund balance carries the potential to be misunderstood, even...

Category: Accounting, Merritt Data