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CITY OF SAN LEANDRO <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />For The Year Ended June 30, 2016 <br /> <br /> <br />NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) <br /> <br />I. Long-Term Debt <br /> <br />In Government-Wide Financial Statements, long-term debt and other financed obligations are reported as <br />liabilities in the appropriate activities. <br /> <br />Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective <br />interest method. Bonds Payable are reported net of the applicable premium or discount. <br /> <br />In Fund Financial Statements long-term debt is not presented but is instead shown in the Reconciliation <br />of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position. <br /> <br />J. Compensated Absences <br /> <br />Vested vacation, sick leave, compensatory time, and related benefits are accrued as appropriate. For <br />governmental funds, compensated absence obligations are recorded in the appropriate governmental funds <br />when due. The portion not currently due is recorded in the government-wide financial statements. For <br />enterprise funds, compensated absences are expensed when earned by employees. At year-end, the <br />accrued but unpaid compensated absence obligations are recorded as current and non-current liabilities in <br />the appropriate enterprise funds. <br /> <br />K. Property Taxes <br /> <br />Property taxes are placed on lien on January 1st for the following fiscal year. Taxes are payable in two <br />installments, due on November 1 and February 1, becoming delinquent on December 10 (for November) <br />and April 10 (for February), respectively. The Alameda County Tax Collector bills and collects property <br />taxes and allocates a portion to the City as billed. Property tax revenues are recognized in the fiscal year, <br />for which the taxes have been levied, provided they become available. In January, 1994, the City elected <br />to continue collection of interest and penalties on delinquent taxes and recognizes these revenues when <br />available. Available means when due or past due and collected within the current period, or expected to <br />be collected soon thereafter, and to be used to pay liabilities of the current period. <br /> <br />L. Deferred Inflows/Outflows of Resources <br /> <br />In addition to assets, the statement of financial position or balance sheets reports a separate section for <br />deferred outflows of resources. This separate financial statement element, deferred outflows of resources, <br />represents a consumption of net position or fund balance that applies to a future period(s) and so will not <br />be recognized as an outflow of resources (expense/expenditure) until then. <br /> <br />In addition to liabilities, the statement of financial position or balance sheet reports a separate section for <br />deferred inflows of resources. This separate financial statement element, deferred inflows of resources, <br />represents an acquisition of net position or fund balance that applies to a future period(s) and so will not <br />be recognized as an inflow of resources (revenue) until that time. <br /> <br />M. Use of Estimates <br /> <br />The preparation of financial statements in conformity with generally accepted accounting principles <br />requires City management to make estimates and assumptions that affect certain amounts and disclosures. <br />Accordingly, actual results could differ from those estimates. <br />48