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CITY OF GEM LAKE, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2016 NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED) Concentration of Credit Risk The City places no. limit on the amount that the City may invest in any one issuer. The following is a list of investments which individually comprise.more than 5 . % of the City's. total investments: Investment Type. Amount Percentage Negotiable Certificates of Deposit Goldman Sachs Bank Co. $ 14o ddb 39.21% Capital One. Bank CD :21.4 [Joo 59.93%. Fair Value Measurements The City uses fair value measurements to recerd fair vaiue adjustments to Certain asset and liabilities and to determine fair value disclosures. The City follows an accounting standard'; which defines fair value, establishes framework - for, measuring. fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value; and requires . expanded disclosures about fair value measurements. In accordance with this s:6ndard, the City has categorized its investments; based on the priority;;of inputs to the Val ua#ion technique into athree-level fair value hierarchy. The fair V.,plue'ki;er'prphy gives;' -the highest priority to quotes and prices in active markets for identical assets or'liabilitios.(Level 1.) and the lowest priority to unobservable inputs: (Level 3}>If the>inputs used to measure the financial instruments fall within different;;leveis. of the hierarchy, the categorization is based on the lowest level input that is significant to- the fair value measurement of the instrument. Financial<assets and liabilities recarded`;on the combined statements of financial position are categori*_based,:an the::;ir puts :to`fhe valuation.techniques as follows: Leuel;7`- Financial assets and Habilities are valued using. inputs that are .urnadjusted 'quoted pnces. .in active, markets accessible at the measurement date of identical financial "assets and liabilities. vel 2 — Financial assets and liabilities are valued based on quoted: prices for similar assets or inputs. '1hat are Observable, either directly or indirectly for substantially the full term,through. corroboration with. observable market data. Level 3':'Financial assets and liabilities are valued using pricing inputs which are unobservable for the asset, inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the.asset. (24)