Reso 2011-053 Attachment - Laserfiche WebLink

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City of San Leandro Notes to Basic Financial Statements For the year ended June 30, 2010 NOTE 1- SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation, continued Private -sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private -sector guidance for their business -type activities and enterprise funds, subject to this same limitation. The City has elected not to follow subsequent private -sector guidance. D. Recognition of Interest Liability In the government -wide financial statements, interest payable of long-term debt is recognized as the liability is incurred for governmental fund types as wells as proprietary fund types. In the fund financial statements, the Governmental fund types do not recognize the interest payable when the liability is incurred. Interest on long-term debt is recorded in the fund statement when payment is made. Proprietary fund types recognize the interest payable when the liability is incurred. E. Use of Restricted and Unrestricted Net Assets When an expense is incurred for purposes for which both restricted and unrestricted net assets are available, the City's policy is to apply restricted net assets first. F. Cash, Cash Equivalents and Investments The City pools cash and investments from all sources, except the fiscal agent cash and investments, for the purpose of increasing income through investment activities. Interest income on investments is allocated on the basis of average month -end cash and investment balances in each fund. Cash and cash equivalents represent cash and investments and restricted cash and investments with an original maturity term of three months or less. Pooled cash and investments allocated to proprietary fund types are considered cash and cash equivalents since specific investments held in the City's pooled cash and investments are not allocated to each fund. The City invests in the California Local Agency Investment Fund ("LAIF"), which is part of the Pooled Money Investment Account operated by the California State Treasurer. LAIF funds are invested in high quality money market securities and are managed to insure the safety of the portfolio. A portion of LAIF's investments are in structured notes and asset -backed securities. As of June 30, 2010 LAIF had invested 5.42% of its funds in such securities. LAW determines fair value on its investment portfolio based on market quotations for these securities where market quotations are readily available, and on amortized cost or best estimate for those securities where market value is not readily available. In accordance with GASB Statement No. 31, highly liquid money market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available. 44