Indianapolis Airport Authority - Indianapolis International Airport

indianapolis Airport AuthorityNotes to Financial StatementsDecember 31, 2010 and 2009Basis of Accounting and Financial ReportingThe financial statements consist of a single-purpose business-type activity, which is reported on theaccrual basis of accounting using the economic resources measurement focus.The Authority prepares its financial statements in conformity with accounting principles generally acceptedin the United States of America as applied to governmental units. GASB is the accepted standard-settingbody for establishing governmental accounting and financial reporting principles. UnderGASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other GovernmentalEntities That Use Proprietary Fund Accounting, the Authority follows all applicable GASB pronouncements.In addition, the Authority follows all Financial Accounting Standards Board (FASB) pronouncementsand Accounting Principles Board (APB) opinions, issued on or before November 30, 1989, unless thosepronouncements conflict with or contradict GASB pronouncements.Cash EquivalentsFor purposes of the statements of cash flows, the Authority considers all highly liquid investments (includingrestricted assets) with a maturity of three months or less when purchased to be cash equivalents.Investment SecuritiesInvestment securities are stated at fair value.Unbilled RevenuesThe Authority accrues revenue for rentals earned but not yet billed as of year end.InventoriesInventories of supplies and materials are valued at average cost and consist primarily of building, vehicleand airfield maintenance parts and supplies.Lessee-Financed ImprovementsCertain leases include provisions whereby lessee-financed improvements become the property of theAuthority. Prior to the adoption of GASB Statement No. 33, Accounting and Financial Reporting forNonexchange Transactions, the Authority recorded lessee-financed improvements only upon leaseholdreversion or lease termination, at which time the improvements were capitalized at fair value and recordedas a capital contribution. Upon implementation of GASB Statement No. 33, the Authority beganrecognizing lessee-financed improvements at cost or estimated cost upon completion of construction, orupon the asset being placed in service, whichever occurs first. However, lessee-financed improvementsplaced in service prior to the adoption of GASB Statement No. 33 continue to be recognized only uponleasehold reversion or lease termination.