Agenda - Council - 06/28/2016 - Laserfiche WebLink

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SIGNIFICANT ACCOUNTING POLICIES Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 of the notes to basic financial statements. The City implemented GASB Statement Nos. 68 and 71 during the year ended December 31, 2015. These statements provide new guidance on accounting and financial reporting for pensions accounted for in the financial statements of plan employers. Implementation of these standards resulted in an adjustment to the beginning equity reported in the City's government -wide and enterprise fund financial statements, as described in Note 1 of the notes to basic financial statements. The application of remaining policies was not changed during the year ended December 31, 2015. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. ACCOUNTING ESTIMATES AND MANAGEMENT JUDGMENTS Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: • Value of Land Held for Resale — These assets are stated at the lower of cost or net realizable value based on management's estimates. • Depreciation — Management's estimates of depreciation expense are based on the estimated useful lives of the assets. • Net Other Post -Employment Benefit (OPEB) Liabilities — Actuarial estimates of the net OPEB obligation is based on eligible participants, estimated future health insurance premiums, and estimated retirement dates. • Pension Benefits — Actuarial estimates of net pension liabilities (assets) are calculated using actuarial calculations that include significant assumptions, including projected changes, investment returns, retirement ages, proportionate share, and employee turnover. • Compensated Absences — Management's estimate is based on current rates of pay and unused compensated absence balances. We evaluated the key factors and assumptions used by management to develop these estimates in determining that they are reasonable in relation to the basic financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. CORRECTED AND UNCORRECTED MISSTATEMENTS Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Where applicable, management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management, when applicable, were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole. -2-