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Indian River County, Florida <br />NOTES TO FINANCIAL STATEMENTS - Continued <br />Year Ended September 30, 1995 <br />NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued <br />L. Unamortized Bond Discounts <br />Bond discounts associated with the issuance of Proprietary Fund revenue bonds are amortized according <br />to the interest method, which results in a constant rate of interest being applied to the amount <br />outsim g at any given time. For financial reporting, unamortized bond discounts are netted against <br />the applicable long-term debt. <br />M. Intangible Assets <br />Land use rights were purchased by the Water and Sewer System Fund from the Golf Course Fund for <br />irrigating the golf course with treated effluent. Leachate disposal rights were purchased by the Solid <br />Waste Disposal Fund from the Water and Sewer System Fund for removal and transportation of leachate <br />from the County landfill to the sewer system. These assets are being amortized using the straight-line <br />method over the estimated useful life of 20 years. <br />N. Deferred Revenues <br />Deferred revenues reported in applicable Governmental Fund Types represent unearned revenues or <br />revenues which are measurable but not available and, in accordance with the modified accrual basis of <br />accounting, are reported as deferred revenues. The deferred revenues will be recognized as revenue in <br />the fiscal year they are earned or become available. <br />0. Accrued Compensated Absences <br />The County records compensated absences in the Governmental Fund Types as an expenditure for the <br />amount accrued during the year that would normally be liquidated with expendable available financial <br />resources. The liability is reported in the General Long -Term Debt Account Group. Proprietary Fund <br />Types accrue compensated absences in the period they are earned. <br />P. Obligation for Bond Arbitrage Rebate <br />Pursuant to Section 148(f) of the U.S. Internal Revenue Code, the County must rebate to the United <br />States Government the excess of interest earned from the investment of certain debt proceeds and <br />pledged revenues over the yield rate of the applicable debt. Based on calculations as of September 30, <br />1995, the County has no liability for arbitrage rebate on any of the county's outstanding debt. <br />24 <br />