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<br /> !]C[ß <br /> City of San Marcos, Texas <br /> Exhibit 6 <br /> Notes to General Purpose Financial Statements (continued) <br /> September 30, 1992 <br /> 1. Significant Accounting Policies (continued) <br /> Fiduciary funds are used to account for assets held on behalf of outside parties, including <br /> other governments, or on behalf of other funds within the City. When these assets are <br /> held under the terms of a formal trust agreement, either a pension trust fund, a <br /> non expendable trust fund, or an expendable trust fund is used. The terms <br /> "nonexpendable" and "expendable" refer to whether or not the City is under an obligation <br /> to maintain the trust principal. Agency funds generally are used to account for assets that <br /> the City holds on behalf of others as their agent <br /> Measurement Focus, Fixed Assets, and Long-Term Liabilities <br /> The accounting and financial reporting treatment applied to a fund is detennined by its <br /> measurement focus. All governmental funds and expendable trust funds are accounted <br /> .. <br /> for on a spending or "fmancial flow" measurement focus. This means that only current <br /> assets and cmrent liabilities are generally included on their balance sheets. Their reported <br /> fund balances (net current assets) are considered a measure of "available spendable <br /> resources." <br /> Governmental fund operating statements present increases (revenues and other financing <br /> sources) and decreases (expenditures and other financing uses) in net current assets. <br /> Accordingly, they are said to present a summary of sources and uses of "available <br /> spendable resources" during a period. <br /> , <br /> Fixed assets used in governmental fund type operations (general fixed assets) are <br /> accounted for in the General Fixed Assets Account Group, rather than in governmental <br /> funds. Public domain (infrastructure) general fixed assets consisting of cenain <br /> improvements other than buildings, including roads, bridges, curbs and gutters, streets <br /> and sidewalks, drainage systems, and lighting systems, are not capitalized along with <br /> other general fIXed assets. <br /> Depreciation on general fIXed assets has been provided over the estimated useful lives <br /> using the straight-line method. Net interest costs incurred on the construction of fIXed <br /> assets have not been capitalized as they are not significant. The estimated useful lives are <br /> as follows: <br /> Buildings 20 - 50 years <br /> Improvements 10 - 40 years <br /> Equipment 4 - 10 years <br /> -14- <br />