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PINE RIVER IRRIGATION DISTRICT <br /> NOTES TO FINANCIAL STATEMENTS <br /> DECEMBER 31, 1994 <br /> B. Fund Accounting <br /> The accounts of the District are organized on the basis of funds, each of which is considered a <br /> separate accounting entity. The operations of each fund are accounted for with a separate set of self- <br /> balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or <br /> expenses, as appropriate. Government resources are allocated to and accounted for in individual <br /> funds based upon the purposes for which they are to be spent and the means by which spending <br /> activities are controlled. The various funds are grouped, in the financial statements in this report, <br /> into generic fund types and broad fund categories as follows: <br /> Proprietary Funds <br /> Enterprise Fund - The General Operating Enterprise Fund is used to account for the operations of <br /> the District. Enterprise Funds are used to account for operations(a)which are financed and operated <br /> in a manner similar to private business enterprises - where the intent of the governing body is that <br /> the costs (expenses, including depreciation) of providing goods or services to the general public on <br /> a continuing basis be financed or recovered primarily through user charges; or (b) where the <br /> governing body has decided that periodic determination of revenues earned, expenses incurred, <br /> and/or net income is appropriate for capital maintenance, public policy, management control, <br /> accountability, or other purposes. <br /> All proprietary funds are accounted for on a cost of services or "capital maintenance" measurement <br /> focus. This means that all assets and all liabilities (whether current or noncurrent) associated with <br /> their activity are included on their balance sheets. Their reported fund equity (net total assets) is <br /> segregated into contributed capital and retained earnings components. Proprietary fund type <br /> operating statements present increases (revenues) and decreases (expenses) in net total assets. <br /> C. Basis of Accounting <br /> Basis of accounting refers to when revenues and expenditures or expenses are recognized in the <br /> accounts and reported in the financial statements. Basis of accounting relates to the timing of <br /> measurements made, regardless of the measurement focus applied. <br /> The proprietary funds are accounted for using the accrual basis of accounting. Their revenues are <br /> recognized when they are earned, and their expenses are recognized when they are incurred. <br />