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<br />. <br /> <br />. <br /> <br />. <br /> <br />Note I: <br /> <br />CITY OF ARDEN HILLS, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 3 I, 2003 <br /> <br />SUMMARY OF SIGNifiCANT ACCOUNTING POLICIES - CONTINUED <br /> <br />Proprietary funds are accoWlted for on the flow of economic resources measurement focus and use the accrual <br />basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the <br />time liabilities are incurred. In accordance wHh the provisions of the GASB Statement No. 20, Accounting and <br />Financial Reportingfor Proprietary Funds and other Governmental Entities that use Proprietary Fund Accountl <br />the City applies all applicable GASB pronOlllicements plus all Financial Accounting Standards Board (F ASB) <br />Statements and Interpretations, Accounting Principles Board opinions, and Accounting Research Bulletins issued <br />on or before November 30, 1989, except for those that conflict with or contradict GASB pronouncements. The <br />City has ejected not to apply FASB Statements and Interpretations :issued after November 30, 1989. Proprietary <br />funds include the following fund type: <br /> <br />Enterprise funds and used to accoW1t for those operations that are financed and operated in a manner similar to <br />private business or where the Council has decided that the determination of revenues earned, costs incurred <br />and/or net income is necessary for management accountability. <br /> <br />Account groups_ The general flXed assets account group is used to account for fixed assets not accounted for in <br />proprietary funds. The genera/long-term debt account group lS used to account for general long-term debt and <br />certain other liabilities that are not specific liabilities of proprietary funds. <br /> <br />C. Assets, Liabilities and Equity <br /> <br />Deposits and Investments <br /> <br />The City's cash and cash equivalents are considered to be cash on hand, denmnd deposits and short-term <br />investments 'lNith original maturities of three months or less from the date of acquisition. <br /> <br />Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other <br />authorized investments. Earnings from such investments are allocated on the basis of applicable participation by <br />each of the funds_ <br /> <br />Minnesota staru1es authorize the City to invest in obligations of the U.S, Treasury, corrunercial paper, corporate <br />bonds, repurchase agreements and shares of investment companies registered under the Federal Investment <br />Company Act of] 940 and whose only investments arc obligations guaranteed by the United States or its <br />agencies_ <br /> <br />Investments for the City are reported at fair value, The Minnesota Municipal Money Market FWld investment <br />pool operates in accordance with appropriate State laws and regulations. The reported value of the pool is the <br />same as the fair value of the pool shares. <br /> <br />-13- <br />