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PARIS ECONOMIC DEVELOPMENT CORPORATION <br />(A Component Unit of the City of Paris, Texas) <br />Notes to the Financial Statements (Continued) <br />September 30, 2017 <br />1. Summary of Significant Accounting Policies (Continued) <br />F. Assets, Liabilities, and Fund Balance/Net Position (Continued) <br />I Net Position Flow Assumption (Continued) <br />the PEDC's policy to consider restricted — net position to have been depleted before unrestricted — <br />net position is applied. <br />nwmm���� <br />Sometimes the government will fund outlays for a particular purpose from both restricted and <br />unrestricted resources (the total of committed, assigned, and unassigned fund balance). in order to <br />calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in <br />the governmental fund financial statements a flow assumption must be made about the order in <br />which the resources are considered to be applied. It is the PEDC's policy to consider restricted fund <br />balance to have been depleted before using any of the components, of unrestricted fund balance. <br />Further, when the components of unrestricted fund balance can be used for the same purpose, <br />committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund <br />balance is applied last. <br />5, Fund Balance Policies <br />Fund balance of governmental funds is reported in various categories based on the nature of any <br />limitations requiring the use of resources for specific purposes. PEDC itself can establish limitations <br />on the use of resources through either a commitment (committed fund balance:) or an assignment <br />(assigned fund balance). The committed fund balance classification includes amounts that can be <br />used only for the specific purposes determined by a formal action of the PEDC's highest level of <br />decision-making authority. The governing board is the highest level of decision-making authority <br />for the PEDC that can commit fund balance. Once adopted, the limitation imposed by the board <br />remains in place until a similar action is taken to remove or revise the limitation. <br />6. Restricted Assets and Fund Balance Reserves <br />Certain resources set aside for repayment of revenue bonds and related interest are classified as <br />restricted assets on the balance sheet because their use is limited by applicable bond covenants. The <br />Bond Debt Service Fund is used to accumulate resources for debt service payments over the next <br />twelve months. Governmental funds report reservations of fund balances for amounts that are not <br />considered a current financial resource. <br />The Bond Reserve Fund is accumulated for the purpose of retiring the last of any bonds as they <br />become due or for debt service when the Bond Debt Service Funds are insufficient, <br />7. Land Development Costs <br />PEDC has acquired land and added improvements to develop an industrial park which is to be <br />divided and sold to businesses wanting to locate their facilities in such an area. Land and added <br />improvements are not depreciated because they are: expected to be sold or used as incentives and are <br />not used in PEDC's ongoing activities. <br />8. Capital Assets <br />Capital assets are valued at historical cost or estimated historical cost if actual historical cost is not <br />available. <br />