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CITY Of ROSEVILLE, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CONTINUEOj DECEMBER 31, 1987 Note t- Summary of Significant Ac<ounting Policies (Continued) considered a measure of 'avaitable spenda6le resources.' Governmental fund operating statements prese�t increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "availa6te spendabLe resources" during a period. Fixed assets used in governmentaL fund type operations (general fixed assets) are accounted for in the GeneraL Fixed Assets Actount Group, rather than in Governmental Funds. Pu6Lic domain generat fixed assets consisting of certain improvements other Ihan huildings, including roads. 6ridges, curbs and gutters, streets and sideualks, and lighting systems, are capitalized aLong with other general fixed assets. No depreciation has been provided on general tixed assets. Long-[erm LiabiLities expected to 6e financed from governmentat funds are accounTed for in the GeneraL Long-term �ebt Account Group, not in the governmentaL funds. Tuo account groups differ from "funds' in that they are not involved with measurement of operations. They are�conterned onty with the measurement of financiat position. Noncurrent portions of long-term receivables due to governmentaL funds are reported on their balance sheets, in spite of their measurement focus. However, speciat reporting treatments are used to indicate in alt governmental funds that they shoutd not be considered "avaiLable spendable resources", sinte they do not represent net current assets. Recognition of revenues in these funds represented by noncurrent receivahtes are defierred until they become curreni re<eivabtes. Because of their spending measurement focus, expenditures recognition for governmental fund types exdude amounts represented 6y noncurrent liabiLities. Since they do not affect net current assets, such tong- term amounts are not recognized as governmentat tund type expenditures or fund tiahilities. They are instead reported as Liabilities in the General Long-term Debt Atcount Group. Proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets, intluding fized assets, and all liahitities, incLuding long-term Liabilities associated with their activity, are included on their baLance sheets. Their reported fund equity is segregated into contributed capitat and retained earnings components. The operating statements of the funds preseni increases (revenues) and decreases (expenses) in net total assets. C. easis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financiat statements. Basis of accounting reLates to the timing of the measurement made, regardtess of the measurement focus appLied. Governmental and Agency Funds are accounted for using the modified accruat 6asis of accounting. Their revenues are recognized when they become measurabte and avaiLable as net current assets. AvaiLa6Le means coltectihle within the current period or soon enough thereafter to pay lia6iLities of the current period. Expenditures are generalty recognized under the modified accruat basis of accounting when the related fund lia6itity is i�curred, except for principal and interest on generaL long-term de6i which is recognized when due, and accumutated unpaid vacation and wmpensa[ory time off which are recognized when paid. -30-