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NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Net Position In the government -wide and proprietary fund financial statements, net position represents the differences .between assets, deferred outflows of resources, liabilities,. and deferred MOW of' -resources. Net position: is displayed.in three components: • Net Investment. in Capital Assets —.Consists of capital assets; net of accumulated depreciation, -red0ced by any outstanding debt attributable to acquire capitaf assets. • Restricted Net Position — Consists of net.position restricted when there are limitations imposed on their use:through external. restrictions imposed by.creditors, grantors, or laws or regulations of other governments. • Unrestricted Net .Position. — All other net position. 4h4it. does. not meet the definition.. of "restrictcd" or. "net investment in capital assets." ;'lie City applies restricted resources first when art expense is incurred for which both restricted and unrestricted resources are available. M. Fund BaIstnce Classifications In the fund financial statements, governmental funds report fiend balance in alassificatiO that. disclose constraints for which arigoorits in thbseTtinds can be spent. These classifications are as follows: • Nonspcndable _ Consists of amounts that ar..e not. in spendable form, such as prepaid items, �. inventory, and other long-term assets. • Restricted- — Consists of*arnbtirifs- *related to externally imposed constraints. established by preditors, grantors, or contributors; or constraints imposed by state statutory provisions. • Cbntmitted — Consists of internally* imposed constraits that are established by resolution of the City Council. Those committed amounts cannot be used for any other purpose unless the City. Council removes ,or changes the. specified use by taking the same type of action it employed to previously commit those.amounts. • .Assigned — Consists of internally imposed constraints. These constraints consist of amounts `intended to be used by the City for specific purposes; but do not meet the.cHteria to be classified as restricted. or committed. In governmental funds, assigned *pounts represent intended uses .established• by the governingbody itself or by. an official to wliicb41.1c governing body delegates the. authority. Unassigned. The. residual classification for the General Fund, Which also reflects negative residual amourits in other funds. When both :restricted and unrestricted resources are available for use, it is the. City's policy to first use restricted resources,.xhen use unrestricted resources as they are needed. When committed, assigned; or unassigned resources are available for use; it is the City's. policy'to. use resources. in the following order: 1.) committed, 2) assigned, ana*3) unaissiped. -23-