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Re� 6.1. B. - 179 Jency of the City of Redwood City <br /> Notes to Basic Financial Statements, Continued <br /> For the year ended June 30, 2011 <br /> 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued <br /> B. Basis of Accou�rting/Measureine�it Focus, Corrtinued <br /> Governnlental Fund Financial Statenlents - Governnlental fund fulancial statenlents ulclude a Balance <br /> Sheet and a Statement of Revenues, E�enditlires and Changes u1 Fund Balances for all major <br /> governnlental funds. P,n acconlpanying schedule is presented to reconcile and explaul the differences <br /> in net assets as presented in these statenlents to t11e net assets presented ii1 the government-wide <br /> financial statenlents. The Agency has presented all funds as nlajor funds. <br /> The followings are fl1e Agency's nlajor fwlds: <br /> Pec�ez�elopnient Agency Fund <br /> T11is fund accounts for fuilds to be provided by loans and/or property tax ulcrenlent fronl specific <br /> redevelopnlent areas for redevelopment projects within tllose areas. <br /> Lou� and Moc�erate Inconie Housing Fune� <br /> This fund accounts for redevelopment property tax increnlent revenues which nlay be used strictly for <br /> low and nloderate ulcome housing. <br /> 2003 Tnx Allocntion Bonc�s Fimd <br /> This fwld accounts for bonds issued in 2003 to finance various downtown improvements by the <br /> Pedevelopnlent Agency <br /> All governnlental funds are accounted for oi1 a spending or "cl�rrent financial resoitt�ces" nleasurenlent <br /> focus and the nlodified accrual basis of accotuzting. Accordingly, only current assets and current <br /> liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes u1 <br /> Fund Balances present increases (revenues and other financulg sources) and decreases (e�enditures <br /> and other financing uses) in net current assets. Under nlodified accrual basis of accounting, revenues <br /> are recognized in the accounting period in wllich they beconle both nleasurable 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 w11en due. The primary revenue sources, which 11ave been treated as <br /> susceptible to accrual by the Agency, are property tax, sales tax, intergovernmental revenues and other <br /> taxes and investnleilt inconle. Expenditures are recorded in the accounting period in whicll the related <br /> fund liability is ulcurred except for claims, judb nents, compensated absence, uzterest on long-ternl debt <br /> which is recognized wllen due. <br /> Deferred revenues arise when potential revenues do not meet bot11 fl1e "measurable" and "available" <br /> criteria for recob �ition uz tlle current period. Deferred revenues also arise when the governnlent <br /> receives resources before it has a legal clainl to them, as w11en grant nlonies are received prior to <br /> incurring qualifying expenditures. In subsequent periods when both revenue recognition criteria are <br /> nlet or when t11e goveriuneilt has a legal claim to the resources, the deferred revenue is removed fronl <br /> t11e conlbined balance slleet and revenue is recognized. <br /> �� <br />