A.         Summary of Significant Accounting Policies:

            Financial Reporting Entity

The County of Lewis Industrial Development Agency (the “Agency”) was established under Title 1 of Article 18-A of the General Municipal Law of the State of New York for the purpose of promoting employment, attracting industry and businesses to the community or area and to lessen the burdens of government and act in the public interest.

The financial statements include Lewis IDA Community Development Corporation (the “Corporation”), a component unit of the Agency.  The Corporation in prior years borrowed funds from the Agency and loaned it to local businesses.  As the loans are repaid to the Corporation, the money is in turn repaid to the Agency.  The governing body of the Lewis IDA Community Development Corporation is substantially the same as the governing body of the County of Lewis Industrial Development Agency, therefore, the financial information of the Corporation is blended with the financial information of the Agency.

The Lewis IDA Community Development Corporation is a nonprofit organization.  The Corporation is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code.  However, income from certain activities not directly related to the Corporation’s tax-exempt purpose is subject to taxation as unrelated business income. In addition, the Corporation qualifies for the charitable contribution deduction under Section 170(b)(1)(A) and has been classified as an organization that is not a private foundation under Section 509(a)(2).

            Basis of Accounting

The Agency's operations consist of a single fund which is a proprietary type fund.  Proprietary funds are accounted for on a flow of economic resources measurement focus.  With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the statement of net assets.  Net assets are segregated into investment in capital assets and unrestricted components.  Proprietary fund-type operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.

The accrual basis of accounting is utilized by proprietary fund types.  Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.

            GASB No. 34

For the fiscal year ended May 31, 2005, the Agency implemented GASB Statement 34, Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments. The significant change is the management discussion and analysis (MD & A) section providing an analysis of the Agency’s overall financial position and results of operations.  The implementation of GASB No. 34 resulted in the need to restate prior year financial statements to be comparative with the current year statements.

            Operating Revenue and Expenses 

            Operating revenue and expenses for proprietary funds are those that result from providing services.