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Indian River County, Florida Notes To Financial Statements Year Ended September 30 , 2002 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B . Measurement Focus And Basis Of Accounting The basic financial statements of the County are composed of the following : • Government-wide financial statements • Fund financial statements • Notes to the financial statements 1 . Government-wide Financial Statements 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 of the 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 . Government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and agency 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. 36