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<br />-32- <br />NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br /> <br />P. Pensions <br /> <br />For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension <br />expense, information about the fiduciary net position of the Public Employees Retirement Association <br />(PERA) and additions to/deductions from the PERA’s fiduciary net position have been determined on the <br />same basis as they are reported by the PERA, except that the PERA’s fiscal year-end is June 30. For this <br />purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments, and <br />refunds are recognized when due and payable in accordance with the benefit terms. Investments are <br />reported at fair value. <br /> <br />The PERA has a special funding situation created by a direct aid contribution made by the state of <br />Minnesota. The direct aid is a result of the merger of the Minneapolis Employees Retirement Fund into <br />the PERA on January 1, 2015. <br /> <br />Q. 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 economic experience, changes in actuarial assumptions, <br />differences between projected and actual investment earnings, changes in proportion, and contributions <br />to the plan subsequent to the measurement date and before the end of the reporting period. These <br />amounts are 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 three sources: property taxes, special assessments, and long-term receivables. These <br />amounts are deferred and recognized as an inflow of resources in the period that the amounts become <br />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 />R. 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 />• Net Investment in Capital Assets – Consists of capital assets, net of accumulated depreciation, <br />reduced by any outstanding debt attributable to acquire capital assets. <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.