Western Michigan University Western Michigan University
Western Michigan University
Notes to Financial Statements Notes to Financial Statements NotesJune to Financial Statements 30, 2012 and 2011 June 30, 2012 and June 2011 30, 2012 and 2011
Note 1 - Basis of Presentation and Significant Accounting Policies (Continued) Note 1 - Basis of Presentation and Significant Accounting Policies (Continued) A complete copy of the audited financial statements of Western Michigan University Foundation, Paper A complete Foundation, copy of the Inc., audited of WesternResearch MichiganFoundation University isFoundation, Technology andfinancial Westernstatements Michigan University available atPaper the Technology Foundation, andcampus Western Michigan University Research Foundation is available at the Foundation offices locatedInc., on the of the University. Foundation offices located on the campus of the University. Cash and Investments - Cash and cash equivalents are defined as highly liquid investments with a maturity Cash andmonths Investments cash equivalents are defined ascash, highlycomprised liquid investments withcapital a maturity of three or less- Cash whenandpurchased. The University’s of working and of three monthsassets, or less when purchased. University’s cash, comprised of readily workingconvertible capital and permanent-core is principally invested inThe investment-grade securities that are to permanent-core assets, is principally invested in investment-grade securities that are readily convertible to cash. The cash is allocated to securities that meet short-, intermediate-, and long-term investment cash. The Investments cash is allocated to securities thatbased meetonshort-, objectives. are reported at fair value, quotedintermediate-, market prices,and withlong-term changes ininvestment fair value objectives. Investments are reported at fair value, based on quoted market prices, with changes in reported as investment income in the statement of revenue, expenses, and changes in net assets. fair value reported as investment income in the statement of revenue, expenses, and changes in net assets. Inventories - Inventories consist primarily of supplies, food, pharmaceuticals, and bookstore items, and are Inventories Inventories primarily supplies, food,bypharmaceuticals, and bookstore items, and are stated at the -lower of costconsist or market, with of cost determined the retail method. stated at the lower of cost or market, with cost determined by the retail method. Operating and Nonoperating Revenue - Operating activities as reported on the statement of revenue, Operating andchanges Nonoperating Revenue - Operating activities as reported the exchange statementtransactions, of revenue, expenses, and in net assets are those activities that generally resultonfrom expenses, and changes in net areservices those activities that generally from exchange transactions, such as payments received for assets providing and payments made for result services or goods received. Nearly such as payments received for providing services and payments made for services or goods received. all of the University’s expenses are from exchange transactions. Certain significant revenue streamsNearly relied all of for theoperations University’sareexpenses exchangerevenue, transactions. Certain significant revenue relied upon recordedare as from nonoperating as defined by GASB Statement No.streams 34, including upon operations are recorded nonoperating revenue, defined byincome. GASB Statement including state for appropriations, federal Pell as grant revenue, gifts, and as investment Restricted No. and 34, unrestricted state appropriations, federal Pell grant revenue, gifts, and investment income. Restricted and unrestricted resources are spent and tracked at the discretion of the recipient University department within the guidelines resources are spent and tracked at the discretion of the recipient University department within the guidelines of donor restrictions, if any. of donor restrictions, if any. Capital Assets - Capital assets are stated at cost if purchased or at appraised value at the date of the gift Capital Assets - Capital Certain assets are cost ifbeen purchased or at to appraised at the date repair of the and gift for donated property. netstated assetsat have designated providevalue for significant for donated property. Certain net assets have been designated to provide for significant repair and maintenance costs to residence facilities. Physical properties, with the exception of land, are depreciated on maintenance costs to residence properties, therespective exception of land, are depreciated on the straight-line method over thefacilities. estimatedPhysical useful service liveswith of the assets. Estimated service the method over the estimated useful service lives of the respective assets. Estimated service livesstraight-line are as follows: lives are as follows: Land improvements 20 years Land improvements 20 Buildings 50 years Buildings 50 years Equipment and software 3-15 Equipment and software 3-15 Library holdings 10 years Library holdings 10 years Bond Issuance Costs - Bond issuance costs are amortized over the life of the related bonds using the Bond Issuance Costs - Bond issuance costs are amortized over the life of the related bonds using the straight-line method. straight-line method.
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