Notes to Financial Statements
December 31, 2000
1. Summary of Significant Accounting Policies. Mosaic Income Trust (the "Trust") is registered with
the Securities and Exchange Commission under the Investment Company Act of 1940 as an open-end,
diversified investment management company. The Trust currently offers three portfolios, each of which is a
diversified mutual fund. This report contains information about one of these portfolios, the Mosaic Institutional
Bond Fund (the "Fund"), which commenced operations May 1, 2000. Its objective is total return within the
policy limitations of investing only in intermediate term securities rated at least "A" by Moody’s Investors Service,
Inc. or Standard & Poor’s Corporation. The remaining two Trust portfolios present their financial information in a
Securities Valuation: Securities having maturities of 60 days or less are valued at amortized cost, which
approximates market value. Securities having longer maturities, for which market quotations are readily available,
are valued at the mean between their bid and asked prices. Securities for which market quotations are not readily
available are valued at their fair value as determined in good faith by the Board of Trustees. Repurchase
Agreements are valued at amortized cost, which approximates market value.
Investment Transactions: Investment transactions are recorded on a trade date basis. The cost of investments
sold is determined on the identified cost basis for financial statement and federal income tax purposes.
Investment Income: Interest income is recorded on an accrual basis. Bond premium is amortized and original
issue discount is accreted over the expected life of each applicable security. Other income is accrued as earned.
The Fund began amortizing premiums and discounts on debt securities using the scientific method of amortization
effective November 30, 2000. Prior to this date, the Fund amortized premiums and discounts on debt securities
using the straight line metho