Page 58 - Moreno Valley 2025 Annual Financial Report

City of Moreno Valley, California

Notes to Financial Statements
For the Year Ended June 30, 2025

Note 1. Organization and Summary of Significant Accounting Policies (Continued)

• The Moreno Valley Housing Authority (the Housing Authority) was established pursuant
to State law section 34240 of the California Health and Safety Code, which allows for
every City to establish a housing authority. The Housing Authority is designed to protect
local housing funds and programs, provide new revenue opportunities for affordable
housing programs, serve the public interest, promote public safety and welfare, and
ensure decent, safe, sanitary and affordable housing accommodations to persons of
low income. The City of Moreno Valley City Council serves as the Housing Authority’s
Commissioners. The City manages, administers and has operational responsibility
for the operations of the Housing Authority. Separate financial statements are not
available for the Housing Authority.

The accounting policies of the City of Moreno Valley conform with generally accepted
accounting principles as applicable to governments. The following is a summary of the
significant policies.

b. Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the
statement of activities) report information on all of the nonfiduciary activities of the primary
government and its component units. For the most part, the effect of interfund activity has
been removed from these statements. The primary government is reported separately from
certain legally separate component units for which the primary government is financially
accountable.

The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment is offset by program revenues. Direct expenses are those that are
clearly identifiable with a specific function or segment. Certain indirect costs are included
in the program expense reported for individual functions and activities. Program revenues
include: 1) charges to customers or applicants who purchase, use or directly benefit from
goods, services or privileges provided by a given function or segment, and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of
a particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds and fiduciary funds,
even though the latter are excluded from the government-wide financial statements. Major
individual governmental funds are reported as separate columns in the fund financial
statements.

c. Measurement Focus, Basis of Accounting and Financial Statements Presentation

The government-wide financial statements are reported using the economic resource
measurement focus and the accrual basis of accounting. Revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Property taxes are recognized as revenues in the year for which they
are levied. Grants and similar items are recognized as revenue as soon as all eligibility
requirements imposed by the provider have been met.

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