Page 67 - Hudson City Schools CAFR 2017

HUDSON CITY SCHOOL DISTRICT
SUMMIT COUNTY, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2017

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

For advance refundings resulting in the defeasance of debt, the difference between the reacquisition
price and the net carrying amount of the old debt is deferred and amortized as component of interest
expense. This accounting gain or loss is amortized over the remaining life of the old debt or the life of
the new debt, whichever is shorter and is presented as a deferred outflow of resources on the statement
of net position.

A reconciliation between the bonds face value and the amount reported on the statement of net position
is presented in Note 8.

S. Pensions

For purposes of measuring the net pension liability, deferred outflows of resources and deferred
inflows of resources related to pensions, and pension expense, information about the fiduciary net
position of the pension plans and additions to/deductions from their fiduciary net positon have been
determined on the same basis as they are reported by the pension systems. For this purpose, benefit
payments (including refunds of employee contributions) are recognized when due and payable in
accordance with the benefit terms. The pension systems report investments at fair value.

T. Extraordinary and Special Items

Extraordinary items are transactions or events that are both unusual in nature and infrequent in
occurrence. Special items are transactions or events that are within the control of the Board of
Education and that are either unusual in nature or infrequent in occurrence. Neither type of transaction
occurred during fiscal year 2017.

U. Fair Value

The District categorizes its fair value measurements within the fair value hierarchy established by
generally accepted accounting principles. The hierarchy is based on the valuation inputs used to
measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical
assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant
unobservable inputs.

NOTE 2 - ACCOUNTABILITY AND COMPLIANCE

A. Change in Accounting Principles

For fiscal year 2017, the District has implemented GASB Statement No. 77, “Tax Abatement
Disclosures”, GASB Statement No. 78, “Pensions Provided Through Certain Multiple-Employer
Defined Benefit Pension Plans”, GASB Statement No. 80, “Blending Requirements for Certain
Component Units - An Amendment of GASB Statement No. 14” and GASB Statement No. 82, “Pension
Issues - An Amendment of GASB Statements No. 67, No. 68 and No. 73”.

GASB Statement No. 77 requires governments that enter into tax abatement agreements to disclose
certain information about the agreement. GASB Statement No. 77 also requires disclosures related to
tax abatement agreements that have been entered into by other governments that reduce the reporting
government’s tax revenues. These disclosures were incorporated in the District’s fiscal year 2017
financial statements (see Note 19); however, there was no effect on beginning net position/fund
balance.

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