5.2. SR 06-19-2006 - Laserfiche WebLink

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ELK RIVER FIRE DEPARTMENT RELIEF ASSOCIATION ELK RIVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2005 AND 2004 Note 3: DETAll..ED NOTES ON ACCOUNTS - CONTINUED Minnesota statute, sections 69.77 and 11A.24 authorize and define the types of securities available to the Association for investment. Accounting principles generally accepted in the United States of America have determined three categories of credit risk for investments: 1. Investments that are insured or registered, or for which the investments are held by the Association or its agent in the Association's name; 2. Investments that are uninsured and unregistered and are held by the counterparty's trust department or agent in the Association's name; and 3. Investments that are uninsured and unregistered and are held by the counterparty, or by its trust department or agent, but not in the Association's name. Following is a summary of the carrying values of the Association's securities, categorized into aforementioned levels of risk, along with the cost of the securities, at December 31, 2004: Fair Value Investments not subject to categorization: Bond Market Common Stock Index Growth Share Income Share Money Market $ 399,409 217,875 173,017 798,385 8,997 Total investments $ 1,597.683 All investments are reported at fair value using published market quotes. Interest is recognized as revenue when earned; dividends are recorded when received. Note 4: FUNDING STATUS AND PROGRESS The amount of the total accrued pension liability is based on a standardized measurement established by the Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by the relief associations for financial statement presentation. This standardized measurement is based on Minnesota statute 69.772. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of service years performed by the members of the Association. A standardized measure of the accrued pension liability was adopted by GASB to enable the readers of relief association financial statements to ( a) assess the relief association's funding status on a going-concern basis, (b) assess progress being made in accumulating sufficient assets to pay benefits when due, and (c) make comparisons among relief associations. Because the standardized measure is used only for disclosure purposes by the Association, the measurement is independent ofan actuarial computation made to determine contributions to the Association. -7-