b'LOS ANGELES FIRE AND POLICE PENSION SYSTEM NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 AND 2023NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of PresentationThe accompanying financial statements are prepared using the accrual basis of accounting. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions are recognized when due, and the employer has made a formal commitment to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of the System. Financial ReportingThe financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, as outlined by the Governmental Accounting Standards Board (GASB). Theaccompanyingfinancialstatementsincludeinformationfromtheprioryearsummarizedfor comparative purposes only. Such information does not include sufficient detail to constitute a presentation in accordance with U.S. generally accepted accounting principles (GAAP). Accordingly, such information should be read in conjunction with the Systems financial statements for the fiscal year ended June 30, 2023, from which such information was derived.Investments and Method Used to Value InvestmentsTemporary investments, consisting primarily of bankers acceptances, commercial paper, certificates of deposit, pooled temporary investments, U.S. Treasury bills, and repurchase agreements along with bonds, stocks, and alternative investments, are reported at fair value. Pooled temporary investments represent funds invested in a custodian-managed discretionary short-term investment fund.This fund invests in a variety of U.S. and foreign securities rated A-1 or P-1 by S&P Global and Moodys Ratings, respectively, or equivalent quality as determined by the custodian. Investments denominated in foreign currencies are translated to the U.S. dollar at the rate of exchange in effect at the Systems year-end.Resulting gains or losses are included in the Systems Statements of Changes in Fiduciary Net Position. The category of alternative investments includes private equity.Private equity investments are composed predominantly of limited partnerships that invest mainly in privately-owned companies. Investment transactions are accounted for on the date the securities are purchased or sold (trade date).Unsettled investment trades as of the fiscal year-end are reported in the financial statements on the accrual basis of accounting.The corresponding proceeds due from sales are reported on the Statements of Fiduciary Net Position as receivables and labeled due from brokers and amounts payable for purchases are reported as liabilities and labeled due to brokers.Dividend income is recorded on ex-dividend date and interest income is accrued as earned.Investmentsarecarriedatfairvalue. Thefairvalueofsecuritiesinvestmentsisgenerallybasedon published market prices or quotations from major investment dealers.Investments for which market quotations are not readily available are valued at their estimated fair value.The fair values of private equity investments are estimated by the investment managers based on consideration of various factors, including current net position valuations of underlying investments in limited partnerships, the financial statements of investee limited partnerships prepared in accordance with accounting principles generally accepted in the United States of America, and other financial information provided by the investment managers of investee limited partnership. 22 SECTION 2 Financials 39'