AgdaPkt 2016-01-11 Closed and Joint SA PFA

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6.1.E. - Page 71 , Notes to the Basic Financial Statements For the year ended June 30, 2015 NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED) L. Interfund Transactions Interfund transactions are reflected as loans, services provided or used, reimbursements, or transfers. Loans reported as receivables and payables are referred to as either "due to/from other funds" (the current portion of interfund loans) or "advances to/from other funds" (the noncurrent portion of interfund loans) as appropriate and are subject to elimination upon consolidation. Any residual balances outstanding between the governmental activities and the business-type activities are reported in the government-wide financial statements as "internal balances." Services provided or used, deemed to be at market or near market rates, are treated as revenues and expenditures or expenses. Reimbursements occur when the funds responsible for particular expenditures or expenses repay the funds that initially paid for them. Such reimbursements are reflected as expenditures or expenses in the reimbursing fund and reductions to expenditures or expenses in the reimbursed fund. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentation. M. Use of Estimates The preparation of the basic financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions. N. Pensions For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City's California Public Employees' Retirement System (CaIPERS) plans (Plans) and additions to /deductions from the Plans' fiduciary net position have been determined on the same basis as they are reported by CaIPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 0. Implementation of New GASB Pronouncements In FY 2014-15 the City adopted the following new accounting standard in order to conform to the following Governmental Accounting Standards Board Statement: GASB Statement No. 68, Accounting and Financial Reporting for Pensions. The Statement addresses accounting and financial reporting for pension plans, and establishes standards for measuring and recognizing liabilities, deferred outflows of resources, and deferred inflows of resources, and expense/expenditures. For the City's pension plan,this Statement identifies the methods and 42