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Future Accounting Standard Changes-Continued <br /> Fair Value Application <br /> This Statement generally requires investments to be measured at fair value.An investment is defined as a security or other asset <br /> that(a)a government holds primarily for the purpose of income or profit and(b)has a present service capacity based solely on its <br /> ability to generate cash or to be sold to generate cash.Investments not measured at fair value continue to include,for example, <br /> money market investments,2a7-like external investment pools,investments in life insurance contracts,common stock meeting <br /> the criteria for applying the equity method,unallocated insurance contracts,and synthetic guaranteed investment contracts.A <br /> government is permitted in certain circumstances to establish the fair value of an investment that does not have a readily <br /> determinable fair value by using the net asset value per share(or its equivalent)of the investment. <br /> This Statement requires measurement at acquisition value(an entry price)for donated capital assets,donated works of art, <br /> historical treasures,and similar assets and capital assets received in a service concession arrangement.These assets were <br /> previously required to be measured at fair value. <br /> Fair Value Disclosures <br /> This Statement requires disclosures to be made about fair value measurements,the level of fair value hierarchy,and valuation <br /> techniques.Governments should organize these disclosures by type of asset or liability reported at fair value. It also requires <br /> additional disclosures regarding investments in certain entities that calculate net asset value per share(or its equivalent). <br /> The requirements of this Statement are effective for financial statements for periods beginning after June 15,2015.Earlier <br /> application is encouraged. <br /> How the Changes in This Statement Will Improve Financial Reporting <br /> The requirements of this Statement will enhance comparability of financial statements among governments by requiring <br /> measurement of certain assets and liabilities at fair value using a consistent and more detailed definition of fair value and accepted <br /> valuation techniques.This Statement also will enhance fair value application guidance and related disclosures in order to provide <br /> information to financial statement users about the impact of fair value measurements on a government's financial position. <br /> (1)Note.From GASB Pronouncements Summaries.Copyright 2014 by the Financial Accounting Foundation,401 Merritt 7,Norwalk, <br /> CT 06856,USA,and is reproduced with permission. <br /> This communication is intended solely for the information and use of the Public Utilities Commission,City Council,management,and <br /> the Minnesota Office of the State Auditor and is not intended to be and should not be used by anyone other than these specified <br /> parties. <br /> The comments and recommendations in this report are purely constructive in nature,and should be read in this context. Our audit <br /> would not necessarily disclose all weaknesses in the system because it was based on selected tests of accounting records and related <br /> data. <br /> If you have any questions or wish to discuss any of the items contained in this letter,please feel free to contact us at your convenience. <br /> We wish to thank you for the opportunity to be of service and for the courtesy and cooperation extended to us by your staff. <br /> 0146 fief,i ,UI <br /> ABDO,EICK&MEYERS,LLP <br /> Minneapolis,Minnesota <br /> April 7,2015 <br /> People <br /> +Process® <br /> Going <br /> Beyond <br /> Numbers <br /> 120 <br />