ABSTRACT
This chapter shows how to determine how much cash is available to pay the debt service – principle and interest – of money borrowed to fund a project. The topics covered are total income, regular income, non-recurring income, total expenses, non-cash expenses, cash expenses, cash available for debt service, and accounting for bartering. In order to determine what funds are available to pay for a water or wastewater project, it is important to understand three elements: regular income, cash expenses, and cash available for debt service. Regardless of the type, the utility accounts bartered items in one of two ways: the utility can sell the goods directly and note the profits as cash income; or the utility can offset other expenses with the goods and note the decrease in total expenses. Depending on whether the goods or services are regular and predictable or a one time occurrence the income can be treated as regular or non-recurring income.
