Turlock Irrigation District Notes to Consolidated Financial Statements (dollars in thousands) Note 2 – Summary of Significant Accounting Policies (continued) Accordingly, all operations of WECA and TWPA are consolidated into TID’s financial statements as blended component units. Internal transactions, including revenues and expenses between the District’s component units and the District, have been eliminated in the accompanying financial statements in accordance with GAAP. Copies of the WECA and TWPA stand-alone annual financial report may be obtained from TID’s executive office at 333 East Canal Drive, Turlock, California 95381. Fiduciary Fund TID has a fiduciary responsibility for a defined benefit pension plan, the Amended and Restated Retirement Plan for Employees and Elective Officer of Turlock Irrigation District (the “Retirement Plan”). The financial activities of the Retirement Plan are included in the financial statements as a Statements of Fiduciary Net Position of the Retirement Plan and Statements Changes in Fiduciary Net Position of the Retirement Plan as of June 30, 2020 and 2019, the Retirement Plans fiscal year end. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. TID’s more significant estimates include fair value estimates for investments; estimated useful lives of utility plant; total pension liability; total other postemployment benefits liability; depletion; and workers’ compensation reserves. Long-term and short-term debt Long-term debt is recorded at the principal amount of the obligations adjusted for original issue discounts and premiums. The premiums and discounts on bonds issued are amortized over the terms of the bonds using the effective interest method and recorded as a component of interest expense. Deferred refunding gain or loss Debt defeasance charges result from debt refunding transactions and comprise the difference between the reacquisition costs and the net outstanding debt balances including deferred costs of the defeased debt at the date of the defeasance transaction. Such charges are included as a component of deferred outflows or deferred inflows and amortized into interest expense over the shorter of the life of the refunded debt or the new debt, using the effective interest method. Utility plant Utility plant is recorded at cost. Capital assets are generally defined by TID as assets with an initial, individual cost of more than $5 and an estimated useful life in excess of one year. The cost of additions, renewals and betterments are capitalized; repairs and minor replacements are charged to operating expenses as incurred. Interest cost incurred before the end of a construction period is recognized as an expense in the period in which the cost is incurred in compliance with GASB Statement No. 89, Accounting for Interest Cost Incurred before the end of a Construction Period. TID incurred gross interest costs of $44,544 and $48,334 during the years ended December 31, 2020 and 2019, respectively.
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