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Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2012 NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued D. Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position or Fund Balances - Continued 10. Capitalization of Interest Interest costs related to bond issues are capitalized during the construction period. These costs are netted against applicable interest earnings on construction fund investments. During the current period, the County did not have any capitalized interest. 11. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. Deferred outflows of resources represent a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The County reports the deferred charge on refundings in the amount of $2,875,239 in this category on the government -wide statement of net position. A deferred charge on refundings results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. In addition to liabilities, the statement of financial position may report a separate section for deferred inflows of resources. Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The County only has one item, unavailable revenue, which arises under the modified accrual basis of accounting and is reported on the governmental funds balance sheet. The source of the unavailable revenue is a special assessment on road paving. This amount is deferred and recognized as an inflow of resources in the period that the amounts become available. 12. Unearned Revenues Unearned revenues represent revenues, which are available but unearned. At September 30, 2012, the total amount of unearned revenues reported on the statement of net position for the governmental activities is $189,294 and for the business -type activities is $29,652. 13. Accrued Compensated Absences The County accrues accumulated unpaid vacation and sick leave when earned by the employee. The current portion is the amount estimated to be used in the following year. The non-current portion is the amount estimated to be used in subsequent fiscal years. Both the current and non-current estimated accrued compensated absences amounts for governmental funds are maintained separately and represent a reconciling item between the fund and government -wide presentations. 53