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NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />W. Use of Estimates <br />The preparation of financial statements, in accordance with accounting principles generally accepted in the <br />United States of America, requires management to make estimates that affect amounts reported in the <br />financial statements during the reporting period. Actual results could differ from such estimates. <br />X. Change in Accounting Principle <br />During the year ended December 31, 2019, the City implemented GASB Statement No. 84, Fiduciary <br />Activities. This statement establishes criteria for identifying and reporting fiduciary activities. The <br />implementation of this statement has resulted in changing the presentation of the financial statements by <br />accounting for the use of certain own -source revenues in the City's newly established Private Developer <br />Special Revenue Fund and its governmental activities, rather than in a fiduciary (agency) fund as it has in <br />the past. This change in accounting principle did not require the restatement of beginning net position or <br />fund balances. <br />NOTE 2 — DEPOSITS AND INVESTMENTS <br />A. Components of Cash and Investments <br />Cash and investments at year-end consist of the following: <br />Deposits $ 6,093,599 <br />Investments 80,287,689 <br />Cash on hand 200 <br />Total $ 86,381,488 <br />B. Deposits <br />In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks <br />authorized by the City Council, including checking accounts and certificates of deposits. <br />The following is considered the most significant risk associated with deposits: <br />Custodial credit risk — In the case of deposits, this is the risk that in the event of a bank failure, the <br />City's deposits may be lost. <br />70 <br />