Institute for the Desert Arabian Horse
Financial Management and Accounting Policies
I. Description of the Organization
The Institute for the Desert Arabian Horse (the “Institute”) is a not-for-profit organization formed in 2004 to protect and conserve the cultural legacy and genetic integrity of the authentic horse of Arabia Deserta as described fully in the organization’s Bylaws.
Basis of Accounting
The financial statements of the Institute are prepared on the accrual basis of accounting in accordance with principles generally accepted in the United States of America.
Basis of Presentation
The presentation of financial statements follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS 117, Financial Statements for Not-for-Profit Organizations). Under SFAS 117, the Institute is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the Society.
III. Summary of Significant Financial Management and Accounting Policies
Assets Limited to Use (Restricted)
Assets limited to Use consist of cash and certificates of deposit set aside by the Board for specific purposes (research projects, publications, educational events) over which the Board retains control, as well as all funds deriving solely or in part from planned gifts and bequests designated for purposes identified by the donors and/or the Board of Directors of the Institute.
The Institute considers all accounts receivable to be fully collectible. Therefore, no allowance for doubtful accounts has been established.
The Institute may maintain an inventory of publications and merchandise for sale. Inventory is stated at the lower of either “cost” or “market” value on a first-in, first-out basis. Included in Other Assets are publications that the Institute expects will not be sold within one year. This portion of the inventory shall be classified as “long-term.”
Property and Equipment
Property and equipment shall be stated at “cost” or, for property received as gifts, at the “fair market” value at the date gifted to the Institute. Depreciation shall be provided over the estimated useful life of the assets using the straight-line method. The cost or other basis of artwork is not depreciated. In the opinion of the Institute these assets have cultural, aesthetic or historical value that is merits perpetual preservation. The following “useful lives” may provide general guidance in determining depreciation:
|Furniture and Fixtures||10 years|
|Leasehold Improvements||31.5 year|
Deferred revenue includes cash received in advance as being earned as revenue. Such revenues could include but not be limited to multi-year contributions, registration or entry fees to be paid for activities scheduled in future years.
The Institute has been granted an exemption from payment of federal and state income taxes under Section 501(c)(3) of the Internal Revenue Code. However, income from activities not directly related to the Institute’s tax exempt purpose is subject to taxation as unrelated business income.