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INDIAN RIVER COUNTy, FLORIDA NOTES TO FINANCIAL STATEMENTS - CONTINUED Year Ended September 30, 1988 1. Summary of Significant Accounting Policies Continued: C. Measurement Focus -.,Continued Account Groups - The General Fixed Assets Account Group and the General Long - Term Debt Account Group are concerned only with the measurement of financial position. They are not involved with the measurement of results of opera- tions. Fixed assets, which are not used in Proprietary Fund operations, are accounted for in the General Fixed Assets Account Group. Depreciation is not charged on the general fixed assets. Long-term debts, which are not intended to be financed through the Proprietary Funds, are accounted for in the General Long -Term Debt Account Group. D. Basis of Accounting - Basis of accounting refers to when revenues and expendi- tures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All Governmental Funds are accounted for using the modified accrual basis of accounting. Under the modified accrual basis, revenues are recognized when they become measurable and available as net current assets. Primary revenues, including taxes, intergovernmental revenues, charges for services, rents and interest are treated as susceptible to accrual under the modified accrual basis. Other revenue sources are not considered measurable and available, and are not treated as susceptible to accrual. Expenditures are generally recog- nized under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include principal and interest on general long-term debt, which is recognized when due and prepaid insurance and similar items which are recorded as expenditures when purchased. Proprietary Funds - The Enterprise and the Internal Service Funds are accounted for using the accrual basis of accounting. Under this method, revenues are recognized when they are earned and expenses are recognized when they are incurred. Unbilled utility receivables are recorded at year end. Fiduciary Funds - The Expendable Trust Funds and the Agency Funds are accounted for on the modified accrual basis. E. Equity in Pooled Cash and Investments - The County, for accounting and invest- ment purposes, maintains a pooled cash and investment account for all Board funds. This gives the County the ability to invest large amounts of idle cash for short periods of time and to maximize earning potential. The "equity in pooled cash and investments" represents the amount owned by each fund of the Board. Cash and investments of Constitutional Officers are generally maintained in separate accounts, but have been combined with the Board's equity in pooled cash and investments for financial statement purposes. 17