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INDIAN RIVER COUNTY, FLORIDA <br />NOTES TO FINANCIAL STATEMENTS - CONTINUED <br />Year Ended September 30, 1992 <br />1. Summary of Sianificant Accountina Policies - Continued: <br />I. Property. Plant and Bouipment - Continued <br />(2) Property, plant and equipment of the Proprietary Fund types are recorded <br />at cost. Donated property, plant and equipment are capitalized at their <br />fair market value at the time received. Depreciation is provided using <br />the straight-line method over the estimated useful lives of the various <br />classes of depreciable assets. The estimated useful lives of the various <br />classes of depreciable assets are as follows: <br />Assets Years <br />Building and improvements 25 - 40 <br />Machinery and equipment 3 - 10 <br />Utility distribution systems 25 - 50 <br />J. Capitalization of interest - Interest costs related to bond issues are capital- <br />ized during the construction period. These costs are netted against applicable <br />interest earnings on construction fund investments. During the current period, <br />the Housing Authority, the Solid Waste Disposal District and the Water and Sewer <br />system Enterprise Punas incurred interest expense during the construction period <br />totaling $845,624. Related interest earnings on construction fund investments <br />totaled $448.003 for net capitalized interest of $397,621. <br />IL%--A - Ho„a I --.,e oo-t- --a ie9-i fee- --soon-eea +ste crae <br />Issuance of 11roprielary Funk revenue bonds are amortized over the life of the <br />bonds using the straight-line method of accounting. <br />L. Unamortized Bond Discount - Bond discount associated with the issuance of <br />Proprietary Fund revenue bonds are amortized according to the interest method, <br />which results in a constant rate of interest being applied to the amount out- <br />standing at any given time. For financial reporting, unamortized bond discount <br />is netted against applicable long-term debt. <br />M. Intangible Assets - Land use rights were purchased by the Water and Sewer System <br />Fund from the Golf Course Fund for irrigating the golf course with treated <br />effluent. Leachate disposal rights were purchased by the Solid Waste Disposal <br />Fund from the Water and Sewer System Fund for removal and transporation of <br />leachate from the County landfill to the sewer system. These assets are being <br />amortized using the straight-line method over the estimated useful life of 20 <br />years. <br />B-21 <br />