Property Tax - Collection of Deferred Amount (Revenue Recognition)
Recognizing property tax revenue when delinquent taxes (previously deferred as unavailable) are collected, converting the deferred inflow to revenue.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash & Cash Equivalents | Asset (+) | 950,000.00 | - |
| Property Taxes Receivable - Delinquent | Asset (-) | - | 950,000.00 |
| Deferred Inflows of Resources - Property Taxes | Deferred Inflow (-) | 950,000.00 | - |
| Property Tax Revenue (Now Available) | Revenue (+) | - | 950,000.00 |
💡 Accountant's Note
When previously deferred property tax receivables are collected in cash, the deferred inflow is eliminated and revenue is recognized — the taxes have now become 'available.' This mirrors the earning process for property tax revenue under modified accrual: the revenue follows the cash, for amounts previously unavailable. The government-wide statements (full accrual) already recognized this revenue in the levy year, creating a reconciling difference between fund and government-wide statements.
Practitioner & Systems Framework
💻 ERP Architecture
Cash receipts from delinquent tax collections must be matched to the specific parcel and year. The corresponding deferred inflow must be reduced by the same amount. Generate a reconciliation of deferred inflows roll-forward (beginning balance + new deferrals - amounts recognized = ending balance) for financial statement note disclosure.
⚠️ Audit Flags
Auditors verify that delinquent tax collections are properly removing the corresponding deferred inflows. A deferred inflows balance that grows continuously without reduction from collections suggests either poor collection enforcement or accounting errors.
📄 Required Documentation
Tax collection receipts by parcel, delinquent tax payment records, deferred inflows roll-forward schedule, property tax module collection report.
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