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Indian River County, Florida <br />Notes To Financial Statements <br />Year Ended September 30, 2011 <br />NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — Continued <br />B. Measurement Focus and Basis of Accounting - Continued <br />1. Government -wide Financial Statements - Continued <br />Program revenues include charges for services, special assessments, and payments made by parties <br />outside of the reporting government's citizenry if that money is restricted to a particular program. <br />Program revenues are netted with program expenses in the statement of activities to present the net <br />expense of each program. <br />Amounts paid to acquire capital assets are capitalized as assets in the government -wide financial <br />statements, rather than reported as expenditures. Issuance of long-term debt is recorded as a liability in <br />the government -wide financial statements, rather than as an other financing source. Amounts paid to <br />reduce long-term indebtedness of the reporting government are reported as a reduction of the related <br />liability, rather than as an expenditure. <br />As a general rule, the effect of interfund activity has been eliminated from the government -wide <br />financial statements. The County chooses to eliminate the indirect costs between governmental <br />activities to avoid a "doubling up" effect. However, interfund services provided and used, such as the <br />sale of gas and diesel from Fleet Management to the government, are not eliminated in the statement of <br />activities. <br />2. Fund Financial Statements <br />The underlying accounting system of the County is organized and operated on the basis of separate <br />funds, each of which is considered to be a separate accounting entity. The operations of each fund are <br />accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, fund <br />equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to <br />and accounted for in individual funds based upon the purposes for which they are to be spent and the <br />means by which spending activities are controlled. <br />Fund financial statements for the primary government's governmental, proprietary, and fiduciary funds <br />are presented after the government -wide financial statements. These statements display information <br />about major funds individually and nonmajor funds in the aggregate for governmental and enterprise <br />funds. <br />we <br />