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09/12/2006 TUE 16:03 FAX 7192545150 LAVRVCD Fax j�� Peter Nichols C�017/029 <br />LOW ER ARKANSAS VALLEY WATER CONSERVANCY DISTRICT <br />NOTES TO FINANCIAL STATEMENTS <br />NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTlNG POLICIES <br />�� The Lower Arkansas ValEey Water Conservancy District was formed pursuant to Colorado Revised <br />Statutes and as decreed by the District Court in and for Pueblo Country, in 2002. The District designates <br />�� '. a seven member Board of Directors to act as the governing authority. The mission of the District is to <br />j: acquire, retain, and conserve native water flowing in the Arkansas River and� its tributaries in the five <br />counties comprising the District. The accounting policies of the District conform to generally accepted <br />, account principles as applicabls to governments. The DistricYs reporting entity applies all relevant <br />�; Government Accounting Standards Board (GASB) pronouncements. The District has impiemented the <br />provisions of GASB 20 with regard #o the application of FASB pronouncements to its proprietary fund. In <br />accordance with the provisions of GASB Statement 24, the District has elected not to apply those FASB <br />Statements and interpretatians issued after November 30, 1989. A summary of significant policies is as <br />foflows: <br />Financial Reportinq Entitv <br />�: Govemmental Accounting Standards Board (GASB) Statement No. 14, "The Financial reporting Entity" <br />amended by GASB Statement No. 39 describes the financial reporting entity as it relates to govemmental <br />accounting. According to this Statement, the financial reporting entity consists of a) the primary <br />� govemment, b} organizations for which the primary govemment is financially accountable, and c) other <br />� organizations whose exclusion from the reporting entity's financial statements would cause those <br />statements to be misleading or incomplete. Any organizations that can be described by �hese last two <br />�� items are included wi#h the primary government in the financial statements as component units. <br />The District is not included in any other govemmental "reporting entity" as defined in GASB No. 14. As <br />required by accounting principles generalfy accepted in the United States of America, these basic <br />financial statemen#s present the District (fhe primary govemment) and its component units if applicable. <br />Currentiy no component units have been included in the District's reporting entity because af a lack of <br />sign�cant operational or financia! relationship with the D9strict. <br />Govemment-Wide and Fund Financial Statements <br />Effective January 1, 2004, the District adopted Statement Number 34, Basic Financial Statements— and <br />ManagemenYs Discussions and Analysis — for State and Local Governments, Statement Number 37, <br />Basic Financial Statements and ManagemenYs Discussion and Analysis for State and Local <br />Govemments, and Statement No. 38, Certain Financial Statement Note Disclosure. <br />The government-wide financiai statemenfs (i.e., the statement of net assets and the statement of <br />activities) report information on all of the nonfiduciary activities of the District. For the most part, fhe effect <br />of interfund activity has been removed from these statements. Governmental activities, which normally <br />are supported by taxes and intergovernmental revenues, are reported separately from business-type <br />activities, which rely to a signlficant extent on fees and charges for support. <br />The statement of activities demonstrates the degree to which the direct expenses of a given function or <br />segments are offset by program revenues. Direct expenses are those #hat are ctearly identifiable with a <br />specific functian. Program revenues include 1) charges to customers or applicants who purchase, use, or <br />directly benefit from goods, services, or privileges provided by a given function and 2) grants and <br />contributions that are restricted to meeting the operational or capital requirements of a particular function. <br />Taxes and other items no# properly included among program revenues are reported instead as general <br />revenues. <br />Separate financial statemenfs are provided for governmental funds and proprietary funds. <br />PAGE 8 <br />