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Redevelopment Agency of the City of Redwood City 6.1. B. - Page 178 Notes to Basic Financial Statements For the year ended June 30, 2011 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Tl1e basic financial statenlents of the Redevelopnlent Agency of tlle City of Redwood City, California, (Agency) have been prepared in conformity with generally accepted accountulg principles (GAAP) as applied to goverilmental agencies. The Governmental Accountulg Staildards Board (GASB) is the accepted standard settulg body for establis11u1g governnlental accowlting and fuzancial reportuzg prulciples. T11e inore sigilificailt of t11e Agency's accounting policies are described below. A. Descriptiori of Reporting Entit� The Agency of the City of Redwood City was created under the provisions of the Conlnlunity Redevelopnlent Law (California Health and Safety Code) to redevelop certain areas in t11e City of Redwood City. A Redevelopment Plan was originally adopted in July 1982 (Original Area); it was anlended u1 May 1985 (First Amendment) and again u1 Decenlber 1989 (Second Anlendnlent) to provide an improved physical, social and econonuc environment in t11e Agenc�s project area. The Agency is authorized to fulance the Plan from various sources, including assistance fronl the City, the State and federal goveriunents, property tax increnlents, interest ulconle and the issuance of Agency bonds. T11e Agency is an integral part of flze City of Redwood City (City) and the Acconlpanying Basic Fulancial Statenlents are included as a conlponent unit of t11e basic financial statenlents prepared by the City. B. Basis of Accou�iting/Measurenae�it Focus T11e accounts of the Agency are organized on t11e basis of funds, eac11 of which is considered a separate accounting entity. The operations of each fund are accounted for wit11 a separate set of self-balancing accounts that conlprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governnlental resources are allocated to and accounted for in uldividual funds based upon the purposes for which t11ey are to be spent and the means by whicll spending activities are controlled. Governnlent - Wide Financial Statenlents - Tl1e Ageilcy's governnlent-wide financial statenlents include a Statement of Net Assets and a Statenlent of Activities and Changes in Net Assets. These statenlents present summaries of governnlental activities for tlle Agency. T11ese financial statenlents are presented on an "econorriic resoi�rces" nleasurenlent focus and the accrual basis of accounting. Accordingly, all of the Agency's assets and liabilities, including capital assets, as well as iilfrastructure assets, and long-term liabilities, are included in the acconlpanying Statemeilt of Net Assets. The Statenlent of Activities presents changes in net assets. Under the accrual basis of accowlting, reveilues are recognized u1 tlle period in which they are earned wllile e�enses are recognized in the period uz which the liability is incurred. Certain elinunations have been nlade as prescribed by GASB Statenlent No. 34 u1 regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Assets have been eliminated except those representulg balances between the governmental activities, which are presented as internal balances and elinlulated u1 t11e total prinlary governnlent column. T11e followulg interfund activities have been elinlulated: ♦ Transfers u1/ out ��