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6.1 B Page 59 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The City has,assigned the useful lives listed as follows to capital assets: Buildings 20-50 Years Parks 25 Years 'I Improvements 33-60 Years Bridges 30 Years Equipment 2-15 Years Traffic Signals 20 Years Streets 20 Years Storm Drains 40 Years K. 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. L. lmplementation of New GASB Pronouncements In 2010 the City adopted new accounting standards in order to conform to the following Governmental Accounting Standards Board Statement: GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets — the Statement requires that all intangible assets not specifically excluded by its scope provisions be classified as capital assets. Governments possess many different types of assets that may be considered intangible assets, including easements, water rights, patents, trademarks, and computer software. The implementation of this statement has not had a significant impact on the City's financial statements. M. Upcoming New GASB Pronouncements In February 2009, the Government Accounting Standards Board issued Statement No. 54 "Fund Balance Reporting and Governmental Fund Type Definitions," which is effective for financial statement periods beginning after June 15, 2010. This pronouncement will have a significant impact on the format and definitions of fund balance reporting at the time of implementation. NOTE 2— CASH AND INVESTMENTS A. Cash and Deposits The carrying amount of the City's cash and deposits, including restricted cash, was $2,297,078 at June 30, 2010. Bank balances before reconciling items were $3,234,154 at June 30, 2010. Of the total bank balances, $506,895 was insured or held by the City or its agent in the City's name and $2,727,259 was collateralized. All cash deposits in banks are fully insured or collateralized. California state law requires that public fund deposits be collateralized by either government securities with a value equal to 110% of the deposits or first trust deed mortgage notes having a value equal to 150%. Per state law each institution 36