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PIEDMONT AREA MENTAL HEALTH, <br />DEVELOPMENTAL DISABILITIES AND SUBSTANCE ABUSE AUTHORITY <br />NOTES TO FINANCIAL STATEMENTS <br />JUNE 30, 2006 <br />NOTE t <br />SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />The Authority's investments with a maturity of more than one (1) year at acquisition and <br />non-money market Investments are carried at fair value as determined by quoted market <br />prices. The securities of the NCCMT Cash Portfolio, an SEC-registered (2a-7) money <br />market mutual fund, are valued at fair value, which is the NCCMT's share price. Money <br />market investments that have a remaining maturity at the time of purchase of one year or <br />less are reported at amortized cost. <br />2. Cash and Cash Equivalents <br />All cash and investments are essentially demand deposits and are considered cash and <br />cash equivalents. The Authority considers demand deposits and investments purchased <br />with an original maturity of three (3) months or less, which are not limited as to use, to be <br />cash and cash equivalents. <br />3. Allowances for Doubtful Accounts <br />All receivables that historically experience uncollectible accounts are shown net of an <br />allowance for dowbtful accounts. This amount is estimated by analyzing the percentage of <br />receivables that were written off in prior years and evaluating current information related to <br />the collectibility of individual receivables. <br />4. Prepaid Items <br />Certain payments to vendors reflect costs applicable to future accounting periods and are <br />recorded as prepaid items in both government-wide and fund financial statements. <br />5. Capital Assets <br />Purchased or constructed capital assets are. reported at cost or estimated historical cost. <br />Donated capital $ssets are recorded at their estimated fair value at the date of donation. <br />Minimum capitalization costs are as follows: leasehold improvements, equipment, and <br />vehicles, $5,000.?'.The cost of normal maintenance and repairs that do not add to the value <br />of the asset or materially extend assets' lives are not capitalized. <br />Capital assets of the Authority are depreciated on a straight-line basis over the following <br />estimated useful lives: <br />Years <br />Vehicles. and Other Equipment 5-15 <br />Leasehdld Improvements 5-15 <br />Buildings 10-30 <br />6. Long-Term Ogligations <br />In the governm®nt-wide financial statements, long-term obligations are reported as <br />liabilities in the applicable governmental activities statement of net assets. <br />(ts> <br />G-N <br />