Comprehensive Annual Financial Report - Cobb County

COBB COUNTY, GEORGIA
NOTES TO FINANCIAL STATEMENTS
September 30, 2007
Note 1. Summary of Significant Accounting Policies (Continued)
In accordance with GASB 31, investments are stated at fair value. Fair value of the external investment
pool, Georgia Fund 1, is equal to the value of the pool shares. See Note 3 for additional information
regarding cash and investments.
F. Restricted Assets
The County’s restricted assets in the Water and Sewer Enterprise Fund includes cash totaling $14,376,198
which is held in a separate account until monies are spent according to the bond covenants.
G. Interfund Receivables/Payables
Activities between funds that are representative of lending/borrowing arrangements outstanding at the end
of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund
loans) or “advances to/from other funds” (i.e., non-current portion of interfund loans). All other outstanding
balances between funds are reported as “due to/from other funds.” Advances between funds, as reported in
the fund financial statements, are offset by a fund balance reserve account in the applicable governmental
fund to indicate that they are not available for appropriation and are not expendable available financial
resources. Any residual balances outstanding between the governmental activities and business-type
activities are reported in the government-wide financial statements as “internal balances.”
H. Inventories
Inventories are valued at cost in the Governmental Fund types and at the lower of cost (first-in, first-out) or
market in the Proprietary Fund types. Inventories in the General and Enterprise funds consist of expendable
supplies held for consumption and items needed for repairs or improvements to the utility system.
The cost is recorded as an asset at the time the individual items are purchased. Reported inventories in the
General Fund are equally offset by a fund balance reserve, which indicates that they do not constitute
“available spendable resources” even though they are a component of net current assets. The consumption
method is used to account for inventories within the County’s governmental and proprietary fund types.
I. Prepaid Items
Payments made to vendors for services that will benefit periods beyond September 30, 2007 are recorded as
prepaid items.
J. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges,
sidewalks, and similar items), are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. Capital assets are defined by the government as
assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years.
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated
capital assets are recorded at estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend
asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives
of the related fixed assets, as applicable. Interest incurred during the construction phase of capital assets of
business-type activities is included as part of the capitalized value of the assets constructed. The County has
fully implemented the retroactive reporting of infrastructure.
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