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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 Of Accounting - Continued Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as fund assets . The proceeds of long-term debt are recorded as an other financing source rather than as a fund liability. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgements, are recorded only when payment is due . Proprietary Funds The County's enterprise funds and internal service funds are proprietary funds. In the fund financial statements, proprietary funds are presented using the accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when the related goods or services are delivered. In the fund financial statements, proprietary funds are presented using the economic resources measurement focus . This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets . Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in total net assets . The Board applies all GASB pronouncements as well as all FASB Statements and Interpretations, APB Opinions andAccounting Research Bulletins, issued on or before November 30, 1989, which do not conflict with or contradict GASB pronouncements . Proprietary fund operating revenues result from exchange transactions associated with the principal activity ofthe fund. Exchange transactions are those in which each party receives and gives up essentially equal values . Nonoperating revenues result from nonexchange transactions or ancillary activities .Operating expenses are costs incurred to provide services whereas nonoperating expenses are costs of debt financings , amortization of intangible assets and loses on assets sales . Amounts paid to acquire capital assets are capitalized as assets in the fund financial statements , rather than reported as an expenditure . Proceeds of long-term debt are recorded as a liability in the fund financial statements, rather than as an other financing source . Amounts paid to reduce long-term indebtedness are reported as a reduction of the related liabilities , rather than as an expense . C. Basis of Presentation GASB Statement 34 sets forth minimum criteria (percentage of the assets , liabilities , revenues or expenditures/ expenses of either fund category and the governmental and enterprise combined) for the determination of major funds . The County has used GASB 34 minimum criteria for major fund determination and has also electively disclosed funds which either had debt outstanding or specific community focus as major funds . The non- major funds are combined in a column in the fund financial statements and detailed in the combining section. 1 . Governmental Major Funds : General Fund - The General Fund is the general operating fund of the County. It is used to account for all financial resources , except those required to be accounted for in another fund. Road Improvement Fees Fund - The Road Improvement Fees Fund accounts for the receipt of traffic impact fees . Funds are used for the upgrading and construction of roads and bridge 42