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City of Louisville <br />Notes to the Financial Statements <br />December 31, 2014 <br />Note 1: Summary of significant accounting policies (continued) <br />C. Measurement focus, basis of accountinq, and financial statement presentation <br />(continued) <br />Additionally, the City reports the following fund type: <br />• Internal Service Funds account for fleet and technology replacements <br />provided to all departments of the City, and for repairs and maintenance to <br />City facilities. The activity of the Internal Service Funds has been eliminated <br />from the government -wide financial statements. <br />The financial statements of the City have been prepared in conformity with <br />accounting principles generally accepted in the United States (GAAP) as applied to <br />governments. The Governmental Accounting Standards Board (GASB) is the <br />accepted standard -setting body for governmental accounting and financial <br />reporting. <br />Internally dedicated resources are reported as general revenues rather than as <br />program revenues. Likewise, general revenues include all taxes. <br />When both restricted and unrestricted resources are available for use, it is the <br />City's policy to use restricted resources, then unrestricted resources as needed. <br />D. Assets, liabilities, and net position/fund balance <br />1. Cash, cash equivalents and investments <br />Cash and cash equivalents include cash on hand, amounts in demand <br />deposits, amounts in local government investment pools, and investments <br />with maturity dates within five years of the date acquired by the City. <br />Investments are stated at fair value. <br />2. Interfund receivables/payables and advances <br />Transactions between funds that are representative of lending/borrowing <br />arrangements outstanding at the end of the fiscal year are referred to as <br />either "due to/from other funds" (i.e., the current portion of interfund loans) or <br />"advances to/from other funds" (i.e., the non -current portion of interfund <br />loans). Any residual balances outstanding between the governmental <br />activities and business -type activities are reported in the government -wide <br />financial statements as "internal balances." Advances from other funds, as <br />reported in the fund financial statements, are offset by a fund balance reserve <br />account in applicable governmental funds to indicate they are not available <br />for appropriation and are not expendable available financial resources. <br />3. Inventories <br />Inventories are valued at cost, using the first-in/first-out method. The costs of <br />inventories are recorded as an expense or expenditure when consumed <br />rather than when purchased. The inventory balance, as reported in the fund <br />43 <br />