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<br />-32- <br />NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br /> <br />P. Deferred Outflows/Inflows of Resources <br /> <br />In addition to assets and liabilities, statements of financial position or balance sheets will sometimes <br />report separate sections for deferred outflows or inflows of resources. These separate financial statement <br />elements represent a consumption or acquisition of net position that applies to a future period and so will <br />not be recognized as an outflow of resources (expense/expenditure) or an inflow of financial resources <br />(revenue) until then. <br /> <br />The City reports deferred outflows and inflows of resources related to pensions in the government -wide <br />and enterprise funds Statement of Net Position. These deferred outflows and inflows result from <br />differences between expected and actual experi ence, changes in proportion, changes of assumptions, <br />differences between projected and actual earnings on pension plan investments, and contributions to the <br />plan subsequent to the measurement date and before the end of the reporting period. These amounts a re <br />deferred and amortized as required under pension standards. <br /> <br />Unavailable revenue, arises only under the modified accrual basis of accounting and, therefore, is <br />reported only in the governmental funds Balance Sheet. The governmental funds report unavailable <br />revenue from two sources: property taxes and special assessments. These amounts are deferred and <br />recognized as an inflow of resources in the period that the amounts become available. <br /> <br />The City also reports deferred inflows of resources related to state aid entitlements received for <br />subsequent years in the government-wide and governmental funds Balance Sheet. This item is deferred <br />and recognized as an inflow of resources in the period that the resources are appropriated. <br /> <br />Q. Net Position Classifications and Flow Assumptions <br /> <br />In the government-wide and proprietary fund financial statements, net position represents the difference <br />between assets, deferred outflows of resources, liabilities, and deferred inflows of resources. Net position <br />is displayed in three components: <br /> <br />• Investment in Capital Assets – Consists of capital assets, net of accumulated depreciation. <br /> <br />• Restricted Net Position – Consists of net position restricted when there are limitations imposed <br />on its use through external restrictions imposed by creditors, grantors, or laws or regulations of <br />other governments. <br /> <br />• Unrestricted Net Position – All other elements of net position that do not meet the definition of <br />“restricted” or “investment in capital assets.” <br /> <br />When both restricted and unrestricted resources are available for use, it is the City’s policy to use <br />restricted resources first, then unrestricted resources as they are needed. <br />