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CITY OF GEM LANCE, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS ❑ECEMBER 31, 2014 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED.) B. Basic Financial Statements (Continued) 1. Government -Wide Statements .(Continued) In the government -wide statement of net position, both the governmental and business -type activities columns; (a) are presented on a consolidated basis by column; and (b) are reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long=term debt and obligations.. The City's net position is reported in three parts: (1) net investment in capital assets; (2) restricted net position; and (3) unrestricted net position, The City first utilizes restricted resources to finance qualifying activities. The statement of activities demonstrates the degree to which the direct expenses of each function of the City's governmental activities. and different business -type activity are offset by program revenues. Direct expenses are those that are clearly identifiable. with a specific function or activity. Program revenues include: (1) fees, fines; and charges paid .by the recipients of goods, services, or privileges. provided. by a liven function or activity; .and (2) grants and contributions that are restricted to meeting the .operation.al or capital requirements of a particular function or activity, Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. 2. Fund Financial Statements The fund financial statements provide information about the City's funds. Separate statements for each fund category, governmental and proprietary, are presented.. The emphasis. of governmental and proprietary fund financiai statements is on major individual governmental and enterprise funds, with each` displayed as separate. columns in the fund financial statements. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. (16)