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Other Estimates—The preparation of the AFR, in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenues, expenditures, assets, and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and during the reported period. Actual results could differ from those estimates. Adoption of New Accounting Pronouncements—During the year ended December 31, 2025, the Town implemented GASB Statements No. 103, Financial Reporting Model Improvements; and No. 105, Subsequent Events. • GASB Statement No. 103 improves key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability, focusing on the Management’s Discussion and Analysis, reporting of unusual or infrequent items, presentation of Proprietary Fund Statements and Major Component Units, and providing a single method for budgetary comparison. • GASB Statement No. 105 improves the financial reporting requirements for subsequent events, clarifying the date through which subsequent events shall be reported as well as differentiating recognized and non-recognized events and establishing specific note disclosures for non-recognized events. The implementation of GASB Statements No. 103 and 105 did not have a material impact on the Town’s financial position or results from operations. Future Impacts of Accounting Pronouncements—The Town has not completed the process of evaluating the impact that will result from adopting GASB Statements No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements; No. 96, Subscription-Based Information Technology Arrangements; and No. 99, Omnibus 2022, effective for the year ending December, 31, 2023, and No. 104, Disclosure of Certain Capital Assets, effective for the year ending December 31, 2026. The Town is, therefore, unable to disclose the impact that adopting GASB Statements No. 94, 96, 99, and 104 will have on its financial position and results of operations when such statements are adopted. Stewardship, Compliance and Accountability – Legal Compliance – Budgets Legal Compliance—Budgets—The Town follows these procedures in establishing the budgetary data reflected in the AFR: • Prior to September 30th, the Town’s Budget Director files a “tentative” budget with the Town Clerk for the following fiscal year to commence on January 1st. This budget, which includes appropriations and estimated revenues, is then presented to the full Town Board by October 5th. • The full Town Board reviews the tentative budget and may adjust before approving a “preliminary” budget and calling for a public hearing, which is generally held in October. • Following the public hearing, revisions may again be made by the Town Board before filing an adopted budget with Erie County by November 20th. • Formal annual budgetary accounts are employed as a management control device for the General and Special Revenue Funds - 90 -