Generally speaking, in language acquisition papers anyway, vocabulary size is done a "word families" rather than words. So "police" and "police station" are counted as a single "word" as long as you also have "station" in the list. Phrasal verbs ("look up to" vs "look in to" for example) are counted separately if I'm not mistake because while the root of the word is the same, it's not the same "word family".