PALM BEACH COUNTY SPORTS COMMISSION, INC.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2022, AND 2021

NOTE 7 - IN-KIND CONTRIBUTIONS (Cont’d)

The Commission also receives donated sports memorabilia and other goods to be auctioned at events. The contributed auction items are recorded at the estimated fair value when donated. For the fiscal year ended September 30, 2022, donated auction items valued at $4,812 were recorded as inventory on the statement of financial position.

NOTE 8 - CONCENTRATIONS-REVENUE

For the years ended September 30, 2022, and 2021, the Commission received 84% and 81% of its revenue, respectively, from expense reimbursements and indirect payments to others paid by Palm Beach County.

NOTE 9 - FAIR VALUE INSTRUMENTS

The Fair Value Measurement Topic of the FASB Accounting Standards Codification defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements for fair value measurements. The Commission measures the fair value of assets and liabilities as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between independent observable inputs and unobservable inputs used to measure fair value as follows:

Level 1: Quoted prices (unadjusted) inactive markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2: Inputs other than quoted market prices included within Level 1 that are observable for an asset or liability) either directly or indirectly.

Level 3: Unobservable inputs for an asset or liability. Level 3 inputs should be used to measure fair value to the extent that observable Level 1 or 2 inputs are not available.

Generally accepted accounting principles require disclosure of an estimate of fair value of certain financial instruments. The Commission's significant financial instruments are cash, accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other short-term assets and liabilities. For these financial instruments (Level 1), carrying values approximates fair value because of the short maturity of these instruments.

NOTE 10 - CONTINGENCIES

The Commission has a contractual agreement with the County. The disbursement of funds received under this agreement generally require compliance with the terms and conditions specified in the agreement. Failure to comply with the terms of the agreement could reduce or eliminate the amount of funds available to the Commission from the County. A significant reduction in the level of funding received from the County would have a substantial effect on the Commission's programs. While this is possible, management believes it is unlikely. The Commission has a longstanding successful relationship with the County and has to date accomplished the objectives of the Commission the provisions of the agreement.