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City of Centerville March 28, 2012 Page 18 Future Accounting Standard Changes — Continued GASB Statement No. 64 - Derivative Instruments Application of Hedge Accounting Ternination Provisions- an Amendment of GASS Statement No. 53 Summary The objective of this Statement is to clarify whether an effective hedging relationship continues after the replacement of swap counterparty or a swap counterparty's credit support provider. This Statement sets forth criteria that establish when the effective hedging relationship continues and hedge accounting should continue to be applied. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2011. Earlier application is encouraged. How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement enhance comparability and improve financial reporting by clarifying the circumstances in which hedge accounting should continue when a swap counterparty, or swap counterparty's credit support provider, is replaced This report is intended solely for the information and use of Council, management, others within the City, and the Minnesota Office of the State Auditor, and is not intended to be and should not be used by anyone other than these specified parties. The comments and recommendation in this report are purely constructive in nature, and should be read in this context. Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting records and related data. If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your convenience. We wish to thank you for the opportunity to be of service and for the courtesy and cooperation extended to us by your staff. March 28, 2012 Minneapolis, Minnesota ABDO, EICK & MEYERS, LLP Certified Public Accountants 952.835.9090 • Fax 952.835.3261 w w w.aemcpas. corn