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 Accrued Expenses

As of September 30, 2022, the Council's accrued expenses include costs of accrued employee benefits and various other expenses.

Contract Reserve

In connection with the Council’s administrative services and agency contract (see Note 6), Palm Beach County advanced the Council $700,000 for use in facilitating vendor payments and other working capital needs, pending reimbursement of requested expenses and replenishment of the reserve account.

Revenue Recognition

Contributions, including unconditional promises to give, are recognized as revenue when the donor's commitment is received. The Council follows the guidance of FASB ASC 958-605, Revenue Recognition. Contributions received are recorded as with or without donor restrictions depending on the existence and/or nature of any donor restrictions. All contributions are considered available without donor restriction use unless specifically restricted by the donor.

Under this standard, contributions that are initially restricted as to time or purpose are required to be reported as with donor restrictions support and are later reclassified to net assets without donor restrictions upon expiration of the time or purpose restriction. If the restriction placed upon a contribution is met within the same accounting period as the receipt of the contribution, the standard permits the contribution to be reported without donor restrictions.

The State of Florida – Local Arts Agency provides the Council with program funding that is to be used for program and/or supporting services. The Council recognizes revenue from grants in the period in which the amounts are earned.

County Contract – County income is on a cost reimbursement basis. Revenue from the County contract is deemed earned and recognized in the Statement of Activities when reimbursement invoices are submitted to the County for specified expenditures.

Revenues from the State of Florida – Specialty License Plate Program are considered contributions that are recorded as net assets with donor restrictions. These contributions and expenditures were made in accordance with Florida Statutes §320.08056 and §320.08058. As of September 30, 2022, the Council received approximately $36,700 of its revenue from the State of Florida – Specialty License Plate Program.

Functional Allocation of Expenses

The costs of providing the various services the Council offers have been summarized on a functional basis in the Statement of Activities. Expenses directly attributable to a specific functional area are reported as expenses of those functional areas. Other expenses are allocated among programs and supporting services based on either the relative salaries incurred or relative square footage occupancy of the program in relation to the total square footage of the building.