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NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />I. Prepaids <br />Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as <br />prepaid items in both government -wide and fund financial statements. In governmental funds, prepaids are <br />recognized by the consumption method, proportionately over the periods that service is provided. <br />J. Interfund Receivables and Payables <br />Activity between funds that is representative of lending or borrowing arrangements is reported as either <br />"due to/from other funds" (current portion) or "advances to/from other funds." All other outstanding <br />balances between funds are reported as "due to/from other funds." Any residual balances outstanding <br />between the governmental activities and business -type activities are reported in the government -wide <br />financial statements as "internal balances." <br />K. State -Wide Pension Plans <br />For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension <br />expense, information about the fiduciary net position of the Public Employees Retirement Association <br />(PERA) and additions to/deductions from the PERA's fiduciary net positions have been determined on the <br />same basis as they are reported by the PERA. For this purpose, plan contributions are recognized as of <br />employer payroll dates and benefit payments and refunds are recognized when due and payable in <br />accordance with the benefit terms. Investments are reported at fair value. <br />L. Deferred Outflows/Inflows of Resources <br />In addition to assets and liabilities, the Statement of Financial Position will sometimes report a separate <br />section for deferred outflows or inflows of resources. Deferred outflows of resources represent a <br />consumption of net assets that applies to future periods and deferred inflows of resources represent an <br />acquisition of net assets that applies to future periods. These separate financial statement elements will not <br />be recognized as an outflow of resources (expense/expenditure) or an inflow of resources (revenue) until <br />that time. <br />The City reports deferred outflows and inflows of resources related to pensions and other post -employment <br />benefits (OPEB) reported in the government -wide and enterprise funds Statement of Net Position. These <br />deferred outflows and inflows result from differences between expected and actual experience, changes of <br />assumptions, changes in proportion, net collective difference between projected and actual earnings on <br />pension plan investments, and contributions to the plan subsequent to the measurement date and before the <br />end of the reporting period. These amounts are deferred and amortized as required under pension and <br />OPEB standards. <br />The City reports deferred inflows of resources related to lease receivables, which requires lessors to <br />recognize deferred inflows of resources to correspond to lease receivables. These amounts are deferred and <br />amortized in a systematic and rationale manner over the term of the lease. The City currently reports <br />deferred inflows of resources for leases in the government -wide statement of net position and governmental <br />funds balance sheet. <br />Deferred inflows of resources for unavailable revenue, arises under a modified accrual basis of accounting <br />and is reported only in the governmental funds Balance Sheet. The governmental funds report unavailable <br />revenue from: long-term and MSA allocation receivables, property taxes, and special assessments. These <br />amounts are deferred and recognized as an inflow of resources in the period the amounts become available. <br />66 <br />