CULTURAL COUNCIL OF NOTES TO FINANCIAL STATEMENTS

PALM BEACH COUNTY, INC.

For the Year Ended September 30, 2022

1. Business and Summary of Significant Accounting Policies, continued Investments, continued

Purchases and sales of investments are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Realized gains or losses on the sale of marketable securities are calculated using the specific-identification method. Change in unrealized gains and losses represent the change in the fair value of the individual investments for the year, or since the acquisition date, if acquired during the year. Investments are stated at fair value based on quoted market prices within active markets. Investment income and gains are reported as increases in net assets without donor restrictions.

Receivables

 Grants receivable – consist of grant reimbursements due from Palm Beach County and the TDC.

 Pledges receivable – consist of pledges (unconditional promises to give) from members of the Council's Board of Directors and from donors for major Gifts, and other programs. Pledges are recorded when the promise is made. Pledges expected to be collected within one year are recorded at their net realizable value. Pledges expected to be collected in future years are initially recorded at fair value using present value of their estimated future cash flows. The discounts on those amounts are computed using an interest rate applicable to the years in which the promises are received (see Note 7), with the annual change in discount included in contribution income in the Statement of Activities.

An allowance for doubtful accounts is provided for receivables for which there is a question as to ultimate collectability. Uncollectible accounts are reserved for when management has determined that the amount will not be collected. As of September 30, 2022, no allowance was deemed necessary, as all receivables are deemed collectible.

Prepaid Expenses

As a part of its normal operations, the Council pays certain expenses including insurance, postage, utility, and deposits prior to the actual use of those assets. Such amounts are recorded as prepaid expenses in the Statement of Financial Position and are recognized as expense as the benefit is realized.

Property and Equipment

Property and equipment is stated at cost, at the date of purchase, or fair value at the date of the donation. All purchases with a cost of $2,500 or more and a useful life in excess of one year are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets ranging between 3 - 39 years.

In 2010, the Council received a donation of land and building (i.e., Montgomery Building), valued at $1,350,000 for use as its primary location. The Council reports these donated assets as net assets without donor restrictions because the donated assets were appropriately placed in service as specified by the donor.