Item - 2023.EX6.7

Tracking Status

  • This item was considered by Executive Committee on July 11, 2023 and was adopted without amendment.

EX6.7 - Deferred Revenue Report at December 31, 2022

Decision Type:
ACTION
Status:
Adopted
Wards:
All

Committee Decision

The Executive Committee: 

 

1. Received the report (June 26, 2023) from the Chief Financial Officer and Treasurer for information.

Origin

(June 26, 2023) Report from the Chief Financial Officer and Treasurer

Summary

The City of Toronto (City) receives monies from external parties and is obligated to set these monies aside for specific purposes outlined in Provincial legislation or third party agreements. These monies may also be set aside for goods and services that will be provided in the future. In both instances, the receipt of these monies creates obligations for the City that must be settled at a future date. An example of such an obligation is the collection of development charges when building permits are issued. These development charges will contribute to the cost of growth related infrastructure required to provide municipal services that support new development. When these monies are received, they are recognized on the City's Statement of Financial Position as Deferred Revenue which is a liability. The deferred revenue amounts are recognized as earned revenue only when the committed investment is completed and expenditures recognized as tangible capital assets in the Statement of Financial Position or as operating expenses in the Statement of Operations and Accumulated Surplus. This report provides an update of deferred revenue balances at December 31, 2022, and earned revenue for the year ended December 31, 2022, which was included in the City's Statement of Operations and Accumulated Surplus in the consolidated financial statement.

 

As at December 31, 2022, the City recognized $5,623.9 million in deferred revenues, increased by $2,259.6 million in monies received and reduced by $1,538.9 million in earned revenues as compared to the December 31, 2021 balance of $4,903.2 million. This balance represents accumulated deferred revenue balances, which are a reflection of obligated investments not yet completed to support growth, or goods and/or service commitments that the City must deliver to third parties, not yet earned and recognized as revenue. Deferred revenues are fully committed based on contractual obligations to support growth-related infrastructure investments in the community, or other service or operational performance obligations.

Background Information

(June 26, 2023) Report from the Chief Financial Officer and Treasurer on Deferred Revenue Report at December 31, 2022
https://www.toronto.ca/legdocs/mmis/2023/ex/bgrd/backgroundfile-237852.pdf
Appendix A - Deferred Revenues as at December 31, 2022
https://www.toronto.ca/legdocs/mmis/2023/ex/bgrd/backgroundfile-237853.pdf

Motions

Motion to Adopt Item moved by Councillor Gary Crawford (Carried)
Source: Toronto City Clerk at www.toronto.ca/council