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Indian River County, Florida <br />Notes To Financial Statements <br />Year Ended September 30, 2006 <br />NOTE I — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued <br />a <br />D. Assets, Liabilities, and Net Assets or Equity - Continued <br />2. Investments <br />Investments consist of U.S. Treasury Securities, U.S. Government Agency Securities, a guaranteed <br />investment contract, the Local Government Surplus Funds Trust Fund Investment Pool (Pool) and the <br />Florida Local Government Investment Trust Fund (Trust). Except for the Pool and the Trust, <br />investments are reported at their fair value based on the average price obtained from three <br />brokers/dealers. Fair value of the Pool and the Trust are based on the fair value per share of the <br />underlying portfolio. <br />3. Allowance for Doubtful Accounts <br />The County provides an allowance for water and sewer accounts receivables that may become <br />uncollectible. At September. 30, 2006, this allowance was $498,324. No other allowances for doubtful <br />accounts are maintained since other accounts receivable are considered collectable as reported at <br />September 30, 2006. <br />4. Receivables and Payables <br />Activities between funds that are representative of lending/borrowing arrangements outstanding at the <br />end of the fiscal year are referred to as "due to/from other funds". Any residual balances outstanding <br />between the governmental activities and business -type activities are reported in the government -wide <br />financial statements as "internal balances". All receivables are shown net of allowance for doubtful <br />accounts. Receivables in excess of 120 days comprise the trade accounts receivable allowance for <br />doubtful accounts. <br />5. Inventories <br />Inventories are valued at cost, which approximates market, using the "first -in, first -out" method of <br />accounting. Inventories of governmental funds are recorded as expenditures when consumed rather than <br />when purchased. <br />6. Prepaid Expenses <br />Prepaid expenses in the governmental funds represent prepayments for services that will be used in <br />future periods. The County's policy is to record the expenditure for the services when they are used <br />rather than when the cash is disbursed. <br />D49 <br />