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Indian River County, Florida Notes To Financial Statements Year Ended September 30, 2003 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B . Measurement Focus And Basis OfAccounting The basic financial statements ofthe County are composed ofthe following : • Government-wide financial statements • Fund financial cial statements • Notes to the financial statements 1 . Government-wide Financial Statements r Government-wide financial statements display information about the reporting government as a whole, except for its fiduciary activities . These statements include separate columns for the governmental and business-type activities ofthe primary government (including its blended component units), as well as its discreetly presented component unit. For the most part, the effect of interfund activity has been removed from these statements . Governmental activities , which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent, on fees and charges for support. Likewise , the primary government is reported separately from the legally separate component unit for which the primary government is financially accountable. t Government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements . Under the accrual basis of accounting, revenues, expenses, gains , losses, assets , and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place . Revenues, expenses, gains, losses, assets, and liabilities resulting from nonexchange transactions are recognized in accordance with the requirements of GASB Statement 33 - Accounting and Financial Reporting for Nonexchange Transactions . Program revenues include charges for services, special assessments , and payments made by parties outside of the reporting government ' s citizenry if that money is restricted to a particular program . Program revenues are netted with program expenses in the statement of activities to present the net cost of each program . Amounts paid to acquire capital assets are capitalized as assets in the government-wide financial statements , rather than reported as an expenditure . Proceeds of long-term debt are recorded as liabilities in the government- wide financial statements , rather than as an other financing source . Amounts paid to reduce long-term indebtedness of the reporting government are reported as a reduction of the related liability, rather than as an expenditure . As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements . The County chooses to eliminate the indirect costs between governmental activities to avoid "dou- bling up" effect. 40