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MANCOS WATER CONSERVANCY DISTRICT <br /> NOTES TO THE BASIC FINANCIAL STATEMENTS <br /> ' December 31, 2011 <br /> (Note 2 continued) <br /> District's governmental activities. Direct expenses are those that are clearly identifiable with a <br /> specific program or function. Program revenues include (a) charges to customers or applicants <br /> ' who purchase, use, or directly benefit from goods, services, or privileges provided by a given <br /> function or program and (b) grants and contributions that are restricted to meeting the <br /> operational or capital requirements of a particular function or program. Revenues that are not <br /> ' classified as program revenues, including all taxes and other items, are presented as general <br /> revenues. <br /> ' The effect of interfund activity has been removed from the government-wide financial <br /> statements. <br /> ' Fund financial statements consist of a series of statements focusing on information about the <br /> District's major governmental and enterprise funds. Separate financial statements are <br /> presented for the governmental and the proprietary fund. <br /> Measurement Focus, Basis of Accounting and Basis of Presentation: <br /> The government-wide financial statements are reported using the economic resources <br /> measurement focus and the accrual basis of accounting, as are the proprietary fund financial <br /> statements. Revenues are recognized when earned and expenses are recognized when a <br /> ' liability is incurred, regardless of the timing of related cash flows. <br /> Governmental fund financial statements are reported using the current financial resources <br /> measurement focus and the modified accrual basis of accounting. Only current assets and <br /> liabilities are included on the balance sheet, and the fund balance includes only spendable <br /> resources. Under the modified accrual basis of accounting, revenues are recognized as soon <br /> as they are both "measurable and available." Measurable means the amount of the transaction <br /> can be determined and "available" means collectible within the current period or soon enough <br /> thereafter to pay liabilities of the current period. For this purpose the District considers <br /> revenues to be available if they are collected within 60 days of the end of the current fiscal <br /> ' period except for property taxes which have been levied to be collected in a subsequent year. <br /> Expenditures are recorded when a liability is incurred as under accrual accounting. General <br /> capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of <br /> ' general long-term debt are reported as other financing sources. <br /> The District has the following governmental fund: <br /> ' General Fund - The General Fund is the District's primary operating fund. It accounts <br /> for all financial resources of the general government, except those required to be <br /> ' accounted for in another fund. <br /> The District has the following proprietary fund: <br /> ' Water Activity Enterprise Fund — The Enterprise Fund accounts for operations that are <br /> financed and operated in a manner similar to private business enterprises where the <br /> ' intent of the governing body is that the costs (including depreciation) of providing goods <br /> or services to the general public on a continuing basis be financed or recovered <br /> primarily through user charges. <br /> 9 <br />