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Town of Palisade, Colorado <br /> NOTES TO FINANCIAL STATEMENTS <br /> December 31, 2009 <br /> NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED <br /> Private-sector standards of accounting and financial reporting issued prior to November 30, 1989, <br /> generally are followed in both the government-wide and proprietary fund financial statements to the extent <br /> that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards <br /> Board. Governments also have the option of following subsequent private-sector guidance for their <br /> business-type activities and enterprise funds, subject to this same limitation. The Town has elected not to <br /> follow subsequent private-sector guidance. <br /> As a general rule the effect of interfund activity has been eliminated from the government-wide financial <br /> statements. Exceptions to this general rule are charges between the government's water, sewer and refuse <br /> ifunctions and various other functions of the government. Elimination of these charges would distort the <br /> direct costs and program revenues reported for the various functions concerned. <br /> Amounts reported as program revenues include 1) charges to customers or applicants for goods, services or <br /> privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, <br /> including special assessments. Internally dedicated resources are reported as general revenues rather than <br /> as program revenues. Likewise, general revenues include all taxes. <br /> Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating <br /> revenues and expenses generally result from providing services and producing and delivering goods in <br /> connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the <br /> Town's enterprise funds are charges to customers for sales and services. Operating expenses for enterprise <br /> funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All <br /> revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. <br /> When both restricted and unrestricted resources are available for use, it is the Town's policy to use <br /> restricted resources first, then unrestricted resources as they are needed. <br /> 5. Estimates <br /> The preparation of financial statements in conformity with accounting principals generally accepted in the <br /> United States of America requires management to make estimates and assumptions that affect certain <br /> reported amounts and disclosures. Accordingly, actual results could differ from those estimates. <br /> ' 6. Risk Management <br /> The Town is one of several local governments that are members of the Colorado Intergovernmental Risk <br /> Sharing Agency (CIRSA). CIRSA is an organization created by an intergovernmental agreement in 1982 <br /> solely to provide property and casualty coverage to its members. Coverage is provided through pooling of <br /> self-insured losses and the purchase of stop-loss insurance coverage. CIRSA is governed by a seven- <br /> member board elected by and from its members. The governing board is autonomous as to budgeting and <br /> fiscal matters. <br /> I <br /> -22- <br />