Basis of Accounting. The financial statements of the Trust are prepared on the following basis and are not intended to present financial position and results of operations in conformity with generally accepted accounting principles: - Royalty income is recorded in the month received by the Trustee (Note 3). - Interest income, interest to be received and distribution payable to Unit holders include interest to be earned on royalty income from the monthly record date (last business day of the month) through the date of the next distribution. - Trust expenses are recorded based on liabilities paid and cash reserves established by the Trustee. - Distributions to Unit holders are recorded when declared by the Trustee (Note 3). The most significant differences between the Trust's financial statements and those prepared in accordance with generally accepted accounting principles are: - Royalty income is recognized in the month received rather than accrued in the month of production. - Expenses are recognized when paid rather than when incurred. - Cash reserves may be established by the Trustee for certain contingencies which would not be recorded under generally accepted accounting principles. The initial carrying value of the Royalty Trust Interests of $61,100,449 was Cross Timbers Oil's historical net book value on February 12, 1991, the date of the transfer to the Trust. Amortization of the Royalty Trust Interests is calculated on a unit-of-production basis and charged directly to trust corpus. Accumulated amortization as of December 31, 1998 and 1997 was $25,075,508 and $22,996,082, respectively.
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Basis of Accounting. The financial statements of the Trust are prepared on the following basis and are not intended to present financial position and results of operations in conformity with generally accepted accounting principles: - Royalty income is recorded in the month received by the Trustee (Note 3). - Interest income, interest to be received and distribution payable to Unit holders include interest to be earned on royalty income from the monthly record date (last business day of the month) through the date of the next distribution. - Trust expenses are recorded based on liabilities paid and cash reserves established by the Trustee. - Distributions to Unit holders are recorded when declared by the Trustee (Note 3). The most significant differences between the Trust's financial statements and those prepared in accordance with generally accepted accounting principles are: - Royalty are i) royalty income is recognized in the month received rather than accrued in the month of production. - Expenses , ii) expenses are recognized when paid rather than when incurred. - Cash incurred and iii) cash reserves may be established by the Trustee for certain contingencies which would not be recorded under generally accepted accounting principles. The initial carrying value of the Royalty Trust Interests of $61,100,449 was Cross Timbers Oil's historical net book value on February 12, 1991, the date of the transfer to the Trust. Amortization of the Royalty Trust Interests is calculated on a unit-of-production basis and charged directly to trust corpus. Accumulated amortization as of December 31, 1998 1997 and 1997 1996 was $25,075,508 22,996,082 and $22,996,08219,762,776, respectively.
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