2003 annual report - California Society of Certified Public Accountants

California CPA, Sept, 2003

INTANGIBLE ASSETS

Intangible assets represent the cost of trademarks and goodwill associated with the Foundation's acquisition of the Western Schools professional education materials. The Foundation is phasing out the Western Schools trade name over a three-year period ending April 30, 2005; accordingly, the Foundation is charging the intangible assets to expense over that period.

DEFERRED LEASE COSTS

Rent expense is recognized on a straight-line basis over the lives of the leases. Deferred lease costs represent rent expense recognized in excess of rental payments made.

DONATED SERVICES

Members of CalCPA donate their time to various activities of CalCPA and the Foundation, including the leadership of the organizations, committees, chapters and member events. The value of this donated time is not reflected in the accompanying financial statements since it does not meet the criteria for recognition.

INCOME TAXES

CalCPA and the Foundation are exempt from income taxes under Internal Revenue Code (IRC) Sections 501(c)(6) and 501(c)(3), respectively, and related California code sections. However, the organizations are subject to income taxes from activities unrelated to their tax-exempt purposes. The Foundation is considered a publicly supported organization.

FUNCTIONAL EXPENSES

The costs of providing the program services and supporting services have been summarized on a functional basis in the statements of activities and of functional expenses. Accordingly, certain costs have been allocated among the program services and supporting services based on estimates of employees' time incurred and on usage of resources.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts mid disclosures. Accordingly, actual results could differ from those estimates.

RECLASSIFICATIONS

Certain 2002 amounts have been reclassified to conform with the 2003 financial statement presentation.

2. RELATED PARTIES

CalCPA shares certain administrative functions with CAMICO Mutual Insurance Company (CAMICO) and Group Insurance Trust (GIT). CalCPA charges GIT and is charged by CAMICO for estimated shares of related expenses. CalCPA also sells services to CAMICO and GIT.

CAMICO provides professional liability insurance for CalCPA members and is endorsed by CalCPA. Since CAMICO is not under common control with CalCPA and the Foundation, the financial statements do not reflect consolidation of CAMICO. Balances of $7 and $49 due from CAMICO as of April 30, 2003 and 2002, respectively, are included in CalCPA's other accounts receivable. Services purchased by CAMICO, net of expenses allocated from CAMICO, totaled $156 for 2003 and $100 for 2002.

GIT is a multiple employer welfare arrangement formed to provide health and welfare insurance plans to CalCPA members at favorable group rates. CalCPA's Council exerts control over the nomination process for the Board of Trustees of GIT. However, since regulatory agencies limit CalCPA's control of GIT's activities, the financial statements do not reflect consolidation of GIT. A balance of $13 due to GIT is included in CalCPA's accounts payable as of April 30, 2003. A balance of $41 due from GIT is included in CalCPA's other accounts receivable as of April 30, 2002. Services purchased and expenses allocated for GIT totaled $255 for 2003 and $211 for 2002.