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i <br /> TOWN OF MASHPEE, MASSACHUSETTS <br /> NOTES TO FINANCIAL STATEMENTS <br /> JUNE 30, 1987 <br /> * Inventories. Inventories of governmental funds are <br /> recorded as expenditures. <br /> * Reserve for Abatements and Exemptions. Provisions for <br /> property tax abatements and exemptions are established for each <br /> annual tax levy as prescribed by statute. The primary intent is <br /> to provide for these potential refunds or allowances during the <br /> year in which the tax would be due and collected. Excessive <br /> amounts no longer necessary are to be transferred to a reserve <br /> account to be used for extraordinary or unforeseen expenses as <br /> prescribed by the Massachusetts General Laws. <br /> * Reserve for Encumbrances. The town records encumbrances <br /> as a Reservation of Fund Balance and the subsequent years' appro— <br /> priations provide authority to complete these transactions as <br /> expenditures. <br /> * Reserve for Extraordinary or Unforeseen Expenditures. <br /> The balance in this account represents the transfer of excess amounts <br /> from the "Reserve For Abatement and Exemption" accounts. This account <br /> was previously known as "Overlay Surplus" and may be appropriated by <br /> town meeting vote for extraordinary or unforeseen expenses in accord— <br /> ance with Chapter 59, Section 25, Massachusetts General Laws. <br /> * Designated Fund Balance. Designated fund balance indicates <br /> that a portion of fund equity which the town has made tentative plans <br /> for or other legal restrictions exist which prevent this equity from <br /> being classified as undesignated. The following have been classified <br /> as designated for special purposes: <br /> 18 <br />