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CITY OF ORONO <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2015 <br /> <br /> <br />(34) <br /> <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />P. Deferred Inflows of Resources <br />In addition to assets, the statements of financial position will sometimes report a <br />separate section for deferred outflows of resources. This separate financial statement <br />element represents a consumption of net position that applies to a future period(s) and <br />so will not be recognized as an outflow of resources (expense/expenditure) until that <br />time. The City has one type of item, deferred outflows related to pensions, which <br />qualifies for reporting in this category. See Note 8 for additional detail. <br /> <br />In addition to liabilities, the statements of financial position or balance sheets will <br />sometimes report a separate section for deferred inflows of resources. This separate <br />financial statement element represents an acquisition of net position that applies to <br />future periods and so will not be recognized as an inflow of resources (revenue) until that <br />time. The City has two types of items which qualify for reporting in this category. The <br />first, unavailable revenue, arises under a modified accrual basis of accounting and is <br />therefore reported only in the governmental funds balance sheet. The governmental <br />funds report unavailable revenue from three sources: property taxes, special <br />assessments, and amounts due from other governments not collected within 60 days of <br />year-end. These amounts are deferred and recognized as an inflow of resources in the <br />period the amounts become available. The City also reports deferred inflows related to <br />pensions on its statements of net position. See Note 8 for additional detail. <br /> <br />Q. Net Position/Fund Balance <br />Net position represents the difference between assets, deferred outflows of resources, <br />liabilities, and deferred inflows of resources in the government-wide and proprietary fund <br />financial statements. Net investment in capital assets consists of capital assets, net of <br />accumulated depreciation, reduced by the outstanding balance of any long-term debt <br />used to build or acquire the capital assets. Portions of net position are reported as <br />restricted when there are limitations imposed on their use through external restrictions <br />imposed by creditors, grantors, or laws or regulations of other governments. <br /> <br />In the fund financial statements, governmental funds report fund balances in the <br />classifications that disclose constraints for which amounts in those funds can be spent. <br />These classifications are as follows: <br /> <br />Nonspendable – portion of fund balances related to prepaids, inventories, long-term <br />receivables, and corpus on any permanent fund. <br /> <br />Restricted – funds are constrained from outside parties (statute, grantors, bond <br />agreements, etc.). <br /> <br />Committed – funds are established and modified by a resolution approved by the <br />City Council. <br /> <br />Assigned – consists of internally imposed constraints approved by the City Finance <br />Director. The City adopted a formal fund balance policy which gives authority to <br />assign fund balances to the Finance Director. <br /> <br />Unassigned – is the residual classification for the General Fund and also reflects the <br />negative residual amounts in other funds.