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Indian River County, Florida <br />Notes To Financial Statements <br />Year Ended September 30, 2006 <br />NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued <br />B. Measurement Focus And Basis Of Accounting - Continued <br />2. Fund Financial Statements - Continued <br />Governmental Funds — Continued <br />Non-current portions of special assessments due to governmental fu <br />nds are reported on their balance <br />sheets in spite of their spending measurement focus. Non-current portions of notes receivable and n <br />advances to other funds are offset by fund balance reserve accounts. I I <br />Because of their spending measurement focus, expenditure recognition for governmental fund types <br />exclude amounts represented by noncurrent liabilities. Since they do not affect net current assets, such <br />long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. <br />Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were <br />expended, rather than as fund assets. The proceeds of long-term debt are recorded as another financing <br />source rather than as a fund liability. However, debt service expenditures, as well as expenditures related <br />to compensated absences and claims and judgments, are recorded only when payment is due. <br />Proprietary Funds <br />The County's enterprise funds and internal service funds are proprietary funds. In the fund financial <br />statements, proprietary funds are presented using the accrual basis of accounting. Revenues are a <br />recognized when they are earned and expenses are recognized when the related goods or services are <br />delivered. In the fund financial statements, proprietary funds are presented using the economic resources <br />measurement focus. This means that all assets and all liabilities (whether current or noncurrent) a <br />associated with their activity are included on their balance sheets. Proprietary fund type operating <br />statements present increases (revenues) and decreases (expenses) in total net assets. The Board applies <br />all GASB pronouncements as well as all FASB Statements and Interpretations, APB Opinions and <br />Accounting Research Bulletins; issued after November 30, 1989, which do not conflict with or <br />contradict GASB pronouncements. <br />Proprietary fund operating revenues result from exchange transactions associated with the principal <br />activity of the fund. Exchange transactions are those in which each party receives and gives up <br />essentially equal values. Non-operating revenues result from non-exchange transactions or ancillary <br />activities. Operating expenses are costs incurred to provide services where as non-operating expenses <br />are costs of debt financings, amortization of intangible assets and losses on the sale of assets. <br />Amounts paid to acquire capital assets are capitalized as assets in the fund financial statements, rather LJ <br />than reported as expenditures. Proceeds of long-term debt are recorded as a liability in the fund financial <br />statements, rather than as another financing source. Amounts paid to reduce long-term indebtedness are <br />reported as a reduction of the related liabilities, rather than as an expense. <br />46 <br />