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City of Paris, Texas <br />-- Notes to Financial Statements (Continued) <br /> September 30, 2002 <br /> <br /> I. Summary of Significant Accounting Policies (Continued) <br /> <br /> B. Measurement Focus, Basis of Accounting and Basis of Presentation <br />-- (Continued) <br /> <br /> Fiduciary Funds (Continued) <br /> <br /> The Nonexpendable Trust Funds are accounted for in essentially the same <br /> manner as the proprietary funds, using the same measurement focus and <br /> basis of accounting. Nonexpendable trust funds account for assets of <br /> which the principal may not be spent. <br /> <br /> The Agency Fund is custodial in nature and does not present results of <br />-- operations or have a measurement focus. Agency funds are accounted for <br /> using the modified accrual basis of accounting. This fund is used to <br /> account for assets that the City holds for others in an agency capacity. <br /> <br /> Account Groups consist of general fixed assets and general long-term debt. <br /> The general fixed assets account group is used to account for fixed assets <br /> not accounted for in proprietary or nonexpendable trust funds. The general <br /> long-term debt account group is used to account for general long-term debt <br /> and certain other liabilities that are not specific liabilities of proprietary <br /> or nonexpendable trust funds. <br /> <br /> C. Assets, Liabilities and Equity <br /> <br />_ 1. Deposits and Investments <br /> <br /> Cash and cash equivalents are considered to be cash on hand, demand <br /> deposits, and short-term investments with original maturities of <br /> three months or less from date of acquisition. <br /> <br /> Statutes authorize the City to invest in obligations of the U. S. <br />-- Treasury, direct obligations of the State of Texas, other obligations <br /> guaranteed or insured by the State of Texas or the United States, <br /> obligations of states and political subdivisions of any state <br />_ meeting certain rating requirements, certificates of deposit, and <br /> fully collateralized direct repurchase agreements having a defined <br /> termination date. <br /> <br /> The City did not engage in repurchase or reverse repurchase agreement <br /> transactions during the current year. <br /> <br />-- Investments are reported in the accompanying balance sheet at fair <br /> value with changes in fair value being reported as part of investment <br /> income. <br /> <br /> 17 <br /> <br /> <br />