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City of Redwood City 6.1.D. - Page 69 <br />Notes to the Basic Financial Statements <br />For the fiscal year ended June 30, 2016 <br />NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />L. Interfund Transactions <br />Interfund transactions are reflected as loans, services provided or used, reimbursements, or transfers. <br />Loans reported as receivables and payables are referred to as either "due to/from other funds" (the <br />current portion of interfund loans) or "advances to/from other funds" (the noncurrent portion of <br />interfund loans) as appropriate and are subject to elimination upon consolidation. Any residual balances <br />outstanding between the governmental activities and the business -type activities are reported in the <br />government -wide financial statements as "internal balances." <br />Services provided or used, deemed to be at market or near market rates, are treated as revenues and <br />expenditures or expenses. <br />Reimbursements occur when the funds responsible for particular expenditures or expenses repay the <br />funds that initially paid for them. Such reimbursements are reflected as expenditures or expenses in the <br />reimbursing fund and reductions to expenditures or expenses in the reimbursed fund. <br />All other interfund transactions are treated as transfers. Transfers between governmental or proprietary <br />funds are netted as part of the reconciliation to the government -wide presentation. <br />M. Use of Estimates <br />The preparation of the basic financial statements in conformity with generally accepted accounting <br />principles requires management to make estimates and assumptions. These estimates and assumptions <br />affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. <br />In addition, estimates affect the reported amount of expenses. Actual results could differ from these <br />estimates and assumptions. <br />N. Pensions <br />For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to <br />pensions, and pension expense, information about the fiduciary net position of the City's California Public <br />Employees' Retirement System (CaIPERS) plans (Plans) and additions to /deductions from the Plans' <br />fiduciary net position have been determined on the same basis as they are reported by CaIPERS. For this <br />purpose, benefit payments (including refunds of employee contributions) are recognized when due and <br />payable in accordance with the benefit terms. Investments are reported at fair value. <br />42 <br />