2003 annual report - California Society of Certified Public Accountants

California CPA, Sept, 2003

In our opinion, the financial statements referred to above present fairly, in all material respects, the individual and consolidated financial positions of The California Society of Certified Public Accountant and California Certified Public Accountants Education Foundation as of April 30, 2003 and 2002, and changes in their net assets and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

GILBERT ASSOCIATES, INC. June 6, 2003

NOTES TO FINANCIAL STATEMENTS (dollars in thousands)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

The California Society of Certified Public Accountants (CalCPA) is a nonprofit incorporated membership organization whose purpose is to advance the profession of accountancy in the State of California. CalCPA provides its members with general and technical resources through its chapters and committees. California Certified Public Accountants Education Foundation (Foundation) is a nonprofit public benefit corporation organized to provide continuing professional education to Certified Public Accountants (CPAs) and other interested parties. Revenues for both CalCPA and the Foundation are derived primarily from CPAs in California. CalCPA and the Foundation share some administrative functions. Such costs are incurred by CalCPA, which charges the Foundation for its estimated share.

PRINCIPLES OF CONSOLIDATION

The Board of Trustees of the Foundation consists of members of CalCPA who are elected by the governing Council of CalCPA. Because of common control, the accompanying financial statements reflect the consolidation of CalCPA and the Foundation. Material transactions between the entities have been eliminated in consolidation.

BASIS OF PRESENTATION

The financial statements are presented in conformity with Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-For-Profit Organizations.

REVENUE RECOGNITION

Membership dues are recognized as revenue in the membership period. Peer review registration fees are recognized over the calendar year. Peer review processing and review fees are recognized as review engagements are completed. Revenues from professional education programs are recognized in the periods the programs are held. Revenues collected in advance are deferred until earned.

CASH AND EQUIVALENTS

For financial statement purposes, CalCPA and the Foundation consider all investments with a maturity at purchase of three months or less to be cash equivalents.

ADVERTISING COSTS

Direct response advertising consists primarily of catalogs and brochures for educational seminars and other events. Direct response advertising costs are capitalized as other current assets and charged to expense in the period the events occur. Other advertising costs are expensed a,s incurred.

INVESTMENTS

Investments are stated at market value.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and depreciated using the straight-line method over estimated useful lives of 3 to 10 years.