AgdaPkt 2007-12-17 - Laserfiche WebLink

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Redevelopment Agency of the City of Redwood City Notes to Basic Financial Statements, Continued For the year ended June 30,2007 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Accountin8/Measurement Focus, Continued Deferred revenues arise when potential revenues do not meet both the "measurable" and "available" criteria for recognition in the current period. Deferred revenues also arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods when both revenue recognition criteria are met or when the government has a legal claim to the resources, the deferred revenue is removed from the combined balance sheet and revenue is recognized. The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34. C. Cash and Investments The Agency pools its available cash with the City f or investment purposes. The City considers pooled cash and investment amounts with original maturities of three months or less to be cash equivalents. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at f air value. Market value is used as f air value f or those securities f or which market quotations are readily available. The City participates in an investment pool managed by the State of Calif ornia titled Local Agency Investment Fund (LAIF), which has invested a portion of the pool funds in Structured Notes and Asset-Backed Securities. LAIF's investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as to change in interest rates. D. Investment in Land Held for Redevelopment The Agency has purchased parcels of land for redevelopment in order to develop or redevelop blighted properties within the City limits. Such land parcels are accounted f or at the lower of cost, estimated net realizable value, or agreed-upon sales price if a disposition agreement has been made with a developer. E. Capital Assets Capital assets are valued at historical cost or estimated historical cost if actual historical cost was not available. Contributed capital assets are valued at their estimated f air market value on the date contributed. Agency's policy is to capitalize all assets with costs exceeding certain minimum thresholds, $5,000 f or machinery and equipment, $100,000 for buildings, improvements, and infrastructure, and with useful lives exceeding two years. Depreciation is recorded on a straight-line basis over estimated useful lives of the assets as follows: 24