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FLORIDA DEVELOPMENT FINANCE CORPORATION NOTES TO FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2017 Note 1- Summary of Significant Accounting Policies (continued) on deposit which was in excess of these insured amounts. Management believes the associated risk is minimized by placing such assets with qualified public depositories. FDFC has not experienced any losses on such accounts. (b) Investments FDFC follows the investment policy of Florida Statute §218.415, which states that units of local government electing not to adopt a written investment policy may invest or reinvest any surplus public funds in their control or possession in (1) the Local Government Surplus Funds Trust Fund, or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act of 1969, (2) Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency, (3) interest-bearing time deposits or savings accounts in qualified public depositories, and (4) direct obligations of the U.S. Treasury. E. Conduit Debt Issuance Fees Issuance fees paid by borrowers for conduit debt obligations are generally recognized as revenue in the period the bonds are issued; however, application fees are not refundable and are typically recognized when received. In addition, fees of $66,125 related to the All Aboard Florida program were recorded as revenue in fiscal 2017 prior to the issuance of the bonds, since these fees are a non-refundable advance of issuance fees. F. All Aboard Florida Reimbursement Revenues Revenues recognized as reimbursement for the All Aboard Florida project are recorded as related expenses are incurred. G. Use of Estimates The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the basic financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. H. Income Taxes FDFC is a not-for-profit corporation and has been determined by the Internal Revenue Service to be a 501(c)(4) company exempt from taxes under Section 501(a) of the Internal Revenue Code. Accordingly, no provision has been made for income taxes. Note 2 - Conduit Debt In accordance with its mission and Chapter 288, Part X, Florida Statutes, FDFC has facilitated the issuance of debt obligations whereby FDFC is merely a conduit issuer of bonds issued on behalf of borrowers. These bonds do not constitute a general debt, liability or obligation of FDFC, the state, or any local government. Additionally, FDFC has assigned all rights to receive payments from the borrowers to the bond purchaser in all bond financing transactions, or assigned all rights to receive payments to a financial institution providing an irrevocable letter of credit which secures bondholders in typical credit enhanced transactions. Assigned payments are not included in the accompanying basic financial statements. 11