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CITY OF ROSEVILLE NOTES TO FINANCIAL STATEME-NTS DECEMBER 31 1997 Note 1- Simmary of Sipnifieant Accountine Policies - continued FIDUCIARY FUNDS Agercy Futtic - Agency funds are used co accoimt for the asse[s held by the Ciry in a trusree capacity or as an agent for individuals, privare organizations, other governments, and/or other funds. ACCOUNT GROUPS General Fixed Assets Account Group - used to account for fixed assets not accounted for in proprietary or trust funds. Genera] Long-Term Debt Accoun[ Group - used to account for general long-tenn debt and certain other liabilities Ihat are not specific liabilities of proprietary or trust funds. C. Measwement Focus The accoun[ing and reporting treatrnent applied to the fixed assers and long-tem� liabili[ies associared with a fund are detern�ined by its measurement focus. Governnental funds are accounted for on a spending or "financ;ial flow" measurement focus. This means dut only current assets and current liabilities are generally included on their balance sheets. Their reporred tund balance is considered a measure of available spendabie resources. Govemmental fund operating starements present increases (revenues and other financing sources) and decreases (expenditwes and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of available spendable resources during a period. Fixed assets used in govemmental fund type operations (general tixed assets) are accounted for in the general tixed assets account group rathe� than in govemmental Cunds. Pubic domain general fixed assets consisting ot cerrain iinprovements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, and lighting systems, are capitalized along with other general fixed assets. No depreciation has been provided on �eneral fixed assets. Long-temi liabilities e�ected to be financed from goverrunental funds are accounred for in the general lon@-terni debt account group no� in the govemmental funds. The account groups differ from "funds" in that they are not involved with measuremen[ of operationti. They are concemed only wi[h the measwement of tinancial position. Norcurrent portions of lorg-term receivables due to governmenwl fwids are reponed on their balanc e sheets in spite of their measurement focus. However, special reporting treaunents are used in goverrunenwl funds to indicate that they should not be considered "available spendable resowces" sirce they do not represent net current assets. Recogni[ion of revenues in these funds represented by noncurrent receivables is deferred until they become current receivables. Because of their spending measurement focus, expendimre recognition for goverrunental fund types exclude amounts represented by noncurrent Iiabilities. Sir�ce they do not affect net current assets such long-tern� a�nounts are not recognized as goverrunenwi fund type expenditwes or fund Iiabilities. They are inctead reported as liabilities in the general long-[enn debt account group. Propnetary fiuds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accountin�. Under rhis mer}wd, revem�es are recorded when eamed, ard expenses are recorded at the time liabilities are incurred. The Ciry applies only those applicable promuncemenrs of the Firurcial Accowuing Stardards Board issued on or before November 30, 1989 in accounting and reporting for its proprietary operations. Proprietary funds include d�e enterprise and intenul service funds. Agency funds are custodiai in nature (asse[s equal liabilities) and do not irnolve measuremen[ ot results ot operatioac. 30