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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 />D. Assets, liabilities, and net position/fund balance (continued) <br />9. Deferred Outflows/Inflows of Resources (continued) <br />charge on refunding results from the difference in the carrying value of <br />refunded debt and its reacquisition price. This amount is deferred over the <br />shorter of the life of the refunded or refunding debt. <br />Deferred inflows of resources, represents an acquisition of net position that <br />applies to a future period(s) and so will not be recognized as an inflow of <br />resources (revenue) until that time. The City has two items that qualify for <br />reporting in this category — deferred revenues from two sources: property <br />taxes and miscellaneous other. These amounts are deferred and <br />recognized as an inflow of resources in the period that the amounts become <br />available. <br />10. Fund Balances <br />The City reflects fund balances in accordance with GASB Statement No. 54, <br />Fund Balance Reporting and Governmental Fund Type Definitions (GASB <br />54). This Statement defines the different types of fund balances that a <br />governmental entity must use for financial reporting purposes. <br />GASB 54 requires that all fund balance amounts be properly reported within <br />one of the following fund balance categories: <br />1. Nonspendable, such as fund balance associated with inventories, <br />prepaid expenditures, and long-term loans and notes receivable. <br />2. Restricted fund balance category includes amounts that can be spent <br />only for specific purposes as stipulated by external resource providers or <br />by law through constitution provisions or enabling legislation. <br />3. Committed fund balance classification includes amounts that can be <br />used only for the specific purposes as determined by City Council <br />ordinance. An ordinance is required to establish, rescind, or modify a <br />fund balance commitment. <br />4. Assigned fund balance classifications are intended to be used by the <br />government for specific purposes but do not meet the criteria to be <br />classified as restricted or committed. As of December 31, 2014, the City <br />Council has not authorized any official to assign fund balance other than <br />through the execution of purchase orders. <br />5. Unassigned fund balance is the residual classification for the General <br />fund and includes all spendable amounts not contained in the other <br />classifications <br />The City does not have an accounting policy regarding which resources <br />(restricted, committed, assigned, or unassigned) are considered to be spent <br />first for expenditures for which more than one resource classification is <br />available and by default have determined committed amounts to be reduced <br />first, followed by assigned amounts, and then unassigned amounts. <br />46 <br />