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Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2011 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B. Basis of Accounting, Measurement Focus and Presentation The accounts of the governmental funds are maintained on the modified accrual basis. Under the modified accrual basis, expenditures are recorded at the time liabilities are incurred. Revenues are recorded when received in cash or when they are considered both measurable and available. The Clerk only considers revenue to be available if collected within the current fiscal year, except for Title IV -D grant revenue. This grant revenue is subject to accrual and has been recognized as revenue of the current fiscal period. Revenues collected in excess of expenditures are not considered earned and are reflected as liabilities. The fiduciary fund is accounted for on the accrual basis. C. Budgetary Requirements State statutes require the Clerk to prepare his budget in two parts: the budget relating to the State court system, including recording; and the budget relating to the requirements of the Clerk as Clerk to the Board of County Commissioners, County auditor, and custodian of all County funds and other County - related duties. The budget relating to the State court system, including recording, is prepared by the Clerk and submitted to the Florida Clerks of Court Operations Corporation (CCOC) prior to October 1 of each year. The budget relating to the requirements of the Clerk as Clerk to the Board of County Commissioners is prepared prior to May 1 and is reviewed, modified if required, and approved by the Board by October 1. Both budgets are adopted on a basis consistent with generally accepted accounting principles. The budget legally adopted by the Clerk must be balanced; that is, the total of estimated receipts, including funding from the Board, shall equal the total estimated expenditures. Management is authorized to transfer budgeted amounts between objects and departments in any fund as long as management does not exceed the total appropriations of a fund. D. Cash and Cash Equivalents Cash and cash equivalents include deposits and all highly liquid investments with maturities of ninety days or less when purchased. E. Prepaid Expenses This account represents prepayments for services that will be used in future periods. The Clerk's policy is to record the expenditure for the services when they are used rather than when the cash is disbursed. F. Capital Assets Acquisitions of equipment are recorded as expenditures at the time of purchase for governmental fund financial statements. Tangible personal property used by the Clerk in operations is reported in the financial statements of the County. Refer to the County -wide note on capital assets for capitalization threshold, depreciation methodology and useful lives. W 11'