CULTURAL COUNCIL OF NOTES TO FINANCIAL STATEMENTS

PALM BEACH COUNTY, INC.

For the Year Ended September 30, 2022

2. Liquidity and Availability of Resources

Financial assets available for general expenditure within one year, that is, without donor restrictions or other restrictions limiting their use comprise the following:

The Council regularly monitors liquidity required to meet its operating needs and other contractual commitments. The Council has various sources of liquidity at its disposal, including cash and investments designated by the board for contingencies plus a $250,000 line of credit, all of which may be drawn upon in the event of unanticipated financial distress or an immediate liquidity need. Part of the Council’s liquidity management plan is to invest cash in excess of the monthly requirements into shortterm investments.

The Council receives significant revenue from a contract with Palm Beach County which typically covers over 75% of its operating expenditures on a direct reimbursement basis. It also receives grants and other private donations, some of which have donor restrictions to be used in accordance with the purpose of the restrictions, typically program costs that fulfill the mission of the Council. Because a donor’s restriction requires resources to be used in a particular manner or in a future period, the Council must maintain sufficient resources to meet those responsibilities to its donors. Some of the Council’s net assets with donor restrictions are available for general expenditure within one year of September 30, 2022 because the restrictions on the net assets are expected to be met by conducting the normal program activities of the Council in the coming year. Accordingly, the related resources have been included in the quantitative information detailing the financial assets available to meet general expenditures within one year.

3. Fair Value Measurements

The following methods and assumptions were used by the Council in estimating the fair value of financial instruments that were not disclosed under FASB ASC Topic 820.

 Cash equivalents – The carrying amount reported approximates fair value.

 Grants, contributions, and other receivable – The carrying amount approximates fair value due to the short term of the receivables.

 Pledges receivable – Valued at the present value of the estimated future cash flow using an approximate discount rate of 1.0%.

 Accounts payable, accrued expenses, and grants payable – The carrying amount reported approximates fair value due to the short-term duration of the instruments.

 Note payable – The recorded value approximates fair value, as the applicable interest rate approximates current market rates.