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6.1 B - Attachment No. 2 <br /> Redevelopment Agency of the City of Redwood City <br /> Notes to Basic Financial Statements,Continued <br /> For the year ended June 30,2009 <br /> 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,Continued <br /> B. Basis of Accounting/Measurement Focus, Continued <br /> Governmental Fund Financial Statements - Governmental fund financial statements include a Balance <br /> Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major <br /> governmental funds. An accompanying schedule is presented to reconcile and explain the differences <br /> in net assets as presented in these statements to the net assets presented in the government-wide <br /> financial statements. The Agency has presented a11 funds as major funds. <br /> The followings are the Agency's major funds: <br /> Redevelopment Agency Fund <br /> This fund accounts for funds to be provided by loans and/or property tax increment from specific <br /> redevelopment areas for redevelopment projects within those areas. <br /> Low and Moderate Income Housing Fund <br /> This fund accounts for redevelopment property tax increment revenues which may be used strictly for <br /> low and moderate income housing. <br /> 1997 Tax Allocation Refunding Bonds Fund <br /> This fund accounts for bonds issued in 1997 to prepay a loan received by the Redevelopment Agency <br /> from the Redwood City Public Financing Authority, which in turn used the proceeds to defease the <br /> Public Financing Authority Series B bonds. <br /> 2003 Tax Allocation Bonds Fund <br /> This fund accounts for bonds issued in 2003 to finance various downtown improvements by the <br /> Redevelopment Agency <br /> All governmental funds are accounted for on a spending or "current financial resources" measurement <br /> focus and the modified accrual basis of accounting. Accordingly, only current assets and current <br /> liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in <br /> Fund Balances present increases (revenues and other financing sources) and decreases (expenditures <br /> and other financing uses) in net current assets. Under modified accrual basis of accounting, revenues <br /> are recognized in the accounting period in which they become both measurable and available to finance <br /> expenditures of the current period. <br /> Revenues are recorded when received in cash,except that revenues subject to accrual(generally 60 days <br /> after year-end) are recognized when due. The primary revenue sources, which have been treated as <br /> susceptible to accrual by the Agency, are property tax, sales tax, intergovernmental revenues and other <br /> taxes and investment income. Expenditures are recorded in the accounting period in which the related <br /> fund liability is incurred. <br /> Deferred revenues arise when potential revenues do not meet both the "measurable" and "available" <br /> criteria for recognition in the current period. Deferred revenues also arise when the government <br /> receives resources before it has a legal claim to them, as when grant monies are received prior to <br /> incurring qualifying expenditures. In subsequent periods when both revenue recognition criteria are <br /> met or when the government has a legal claim to the resources, the deferred revenue is removed from <br /> the combined balance sheet and revenue is recognized. <br /> 23 <br />