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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 />N. Fair Value Measurement <br /> <br />Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an <br />orderly transaction between market participants at the measurement date. The City categorizes its fair <br />value measurements within the fair value hierarchy established by generally accepted accounting <br />principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair <br />value into three levels based on the extent to which inputs used in measuring fair value are observable in <br />the market. <br /> <br /> Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. <br /> <br /> Level 2 inputs are inputs – other than quoted prices included within level 1 that are observable for <br /> an asset or liability, either directly or indirectly. <br /> <br /> Level 3 inputs are unobservable inputs for an asset or liability. <br /> <br />If the fair value of an asset or liability is measured using inputs from more than one level of the fair value <br />hierarchy, the measurement is considered to be based on the lowest priority level input that is significant <br />to the entire measurement. <br /> <br />O. Implementation of New Governmental Accounting Standards Board (GASB) Pronouncements <br /> <br />Management adopted the provisions of the following Governmental Accounting Standards Board <br />(GASB) Statements which became effective during the year ended June 30, 2016. <br /> <br />GASB Statement No. 72 – Fair Value Measurement and Application. The intention of this Statement is <br />to enhance the comparability of financial statements among governments by requiring measurement of <br />certain assets and liabilities at fair value using a consistent and more detailed definition of fair value and <br />accepted valuation techniques. It also enhances fair value application guidance and related disclosures. <br /> <br />GASB Statement No. 76 – The Hierarchy of Generally Accepted Accounting Principles for State and <br />Local Governments. The objective of this statement is to reduce the GAAP hierarchy to two categories of <br />authoritative GAAP from the four categories under GASB Statement No. 55. The statement is effective <br />for the periods beginning after June 15, 2015, or the 2015-2016 fiscal year. <br /> <br />GASB Statement No. 79 – Certain External Investment Pools and Pool Participants. The objective of <br />this Statement is to address for certain external investment pool and their participants the accounting and <br />financial reporting implications that result from changes in the regulatory provisions referenced by <br />previous accounting and financial reporting standards. This statement is effective for the periods <br />beginning after December 15, 2015, or the 2015-2016 fiscal year. <br /> <br /> <br /> <br />49