Southeast Harris County Economic Development Council, Inc. dba Economic Alliance Houston Port Region

NOTES TO FINANCIAL STATEMENTS (Continued)

For the Years Ended December 31, 2021 and 2020

Contributions

Gifts of cash and other assets received without donor stipulations are reported as revenue and net assets without donor restrictions. Gifts received with a donor stipulation that limits use are reported as revenue and net assets with donor restrictions. When a donor-stipulated time restriction ends or purpose restriction is accomplished, net assets with donor restrictions are reclassified to unrestricted net assets without donor restrictions and reported in the Statements of Activities as net assets released from restrictions. Gifts having donor stipulations, which are satisfied in the period the gift is received, are reported as revenue and net assets without donor restrictions.

Cash and Cash Equivalents

Cash equivalents consist of short-term, highly liquid investments, which are readily convertible into cash within 90 days of purchase.

Capital Assets

Capital assets consist of a building, building improvements, and equipment, mainly office equipment. All capital assets are valued at cost or at acquisition value at date of a gift, if donated. Depreciation is computed using the straight-line method over the following estimated useful lives of assets:

Deferred Revenue

Advance income from membership dues, contracts, and other revenues is deferred and recognized over the periods to which it relates.

Allowance for Doubtful Accounts

The Council utilizes the allowance method for writing off bad debts. Management has set the allowance for doubtful accounts based on historical rates of nonpayment relative to revenues, and the adopted policy is to write off receivables if not received within 18 months. As of December 31, 2021, the allowance for doubtful accounts was $1,000.

Functional Allocation of Expenses

The costs of providing various programs and other activities have been summarized on a functional basis in the Statements of Activities. Cost benefits have been allocated according to respective programs and support services. Advertising expenses are expensed in the period incurred.