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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 D . Assets , Liabilities, and Net Assets or Equity = Continued ' 5 . Inventories ' Inventories are valued at cost, which approximates market, using the "first-in, first-out" method of accounting. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. ' 6. Restricted Assets Certain net assets of the County are classified as restricted assets on the statement of net assets because their use is limited either by law through constitutional provisions or enabling legislation; or by restrictions imposed externally by creditors , grantors , contributors , or laws or regulations of other governments . In a fund with both restricted and ' unrestricted asstes, qualified expenses are considered to be paid first from restricted net assets and then from unrestricted net assets . 7. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e . g. , roads, bridges, right-of-ways, ' water and sewer distribution systems and similar items), are reported in the applicable governmental or business-type activities column in the government-wide financial statements . Capital assets are defined by the County as assets with an initial , individual cost of $ 750 or more and an estimated useful life in excess of one year. Except for roads and ' bridges constructed prior to October 1 , 1981 , assets are recorded at historical cost . Roads and bridges constructed prior to October 1 , 1981 are reported at estimated historical cost. Donated capital assets are recorded at estimated fair market value at the date of donation. ' The costs of normal maintenance and repairs that do not add to the value of the asset or materially tenally extend its useful life are not capitalized . Major outlays for capital assets and improvements are capitalized as projects are constructed . Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. ' The Board holds legal title to the capital assets used in the operations of the Board, Clerk of the Circuit Court, Property Appraiser, Supervisor of Elections and Tax Collector, and is accountable for them under Florida Law. The Sheriffis accountable for and thus maintains capital asset records pertaining only to equipment used in his operations. These assets have been combined with the Board's governmental activities capital assets in the statement of net assets . ' 45