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CITY OF SOUTH BEND <br />NOTES TO FINANCIAL STATEMENTS <br />(Continued) <br />Amounts reported as program revenues include (1) charges to customers or applicants for goods, <br />services or privileges provided, (2) operating grants and contributions, and (3) capital grants and con- <br />tributions. Internally dedicated resources are reported as general revenues rather than as program <br />revenues. Likewise, general revenues include all taxes. <br />Proprietary funds distinguish operating revenues from nonoperating items. Operating revenues and <br />expenses generally result from providing services and producing and delivering goods in connection <br />with a proprietary fund's principal ongoing operations. The principal operating revenues of the enter- <br />prise funds are charges to customers for sales and services. Operating expenses for enterprise funds <br />and internal service funds include the cost of sales and services, administrative expenses, and <br />depreciation on capital assets. All revenues and expenses not meeting this definition are reported as <br />nonoperating revenues and expenses. <br />When both restricted and unrestricted resources are available for use, it is the primary government's <br />policy to use restricted resources first, then unrestricted resources as they are needed. <br />D. Assets, Liabilities and Net Assets or Equity <br />1. Deposits and Investments <br />The primary government's cash and cash equivalents are considered to be cash on hand, <br />demand deposits and short -term investments with original maturities of three months or less from <br />the date of acquisition. <br />State statute (IC 5 -13 -9) authorizes the primary government to invest in securities, including but <br />not limited to, federal government securities, repurchase agreements, and certain money market <br />mutual funds. Certain other statutory restrictions apply to all investments made by local govern- <br />mental units. <br />Nonparticipating certificates of deposit, demand deposits and similar nonparticipating negotiable <br />instruments that are not reported as cash and cash equivalents are reported as investments at <br />cost. <br />Debt securities are reported at fair value. Debt securities are defined as securities backed by the <br />full faith and credit of the United States Treasury or fully insured or guaranteed by the United <br />States or any United States government agency. <br />Open -end mutual funds are reported at fair value <br />Money market investments that mature within one year or less at the date of their acquisition are <br />reported at amortized cost. Other money market investments are reported at fair value. <br />Investment income, including changes in the fair value of investments, is reported as revenue in <br />the operating statement. <br />2. Interfund Transactions and Balances <br />Activities between funds that are representative of lending /borrowing arrangements outstanding <br />at the end of the fiscal year are referred to as " interfund receivables /payables" (i.e., the current <br />and noncurrent portion of interfund loans). All other outstanding balances between funds are <br />reported as "interfund services provided /used." Any residual balances outstanding between the <br />governmental activities and business -type activities are reported in the government -wide financial <br />statements as "internal balances." <br />31 <br />