FINANCIAL COMPILATION TRANSACTIONS OF THE AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION, VOL. 125, 2014

ACCOUNTANTS’ COMPILATION REPORT TO THE BOARD OF TRUSTEES AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA

We have compiled the accompanying statement of financial position of the American Clinical and Climatological Association (a nonprofit organization) as of December 31, 2012, and the related statements of activities and cash flows for the year then ended. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or provide any assurance about whether the financial statements are in accordance with accounting principles generally accepted in the United States of America. Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements. Our responsibility is to conduct the compilation in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. The objective of a compilation is to assist management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements. The supplementary information on pages 11 and 12 is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information has been compiled from information that is the representation of management. We have not audited or reviewed the supplementary information and, accordingly, do not express an opinion or provide any assurance on such supplementary information.

Baton Rouge, Louisiana March 4, 2013 lxvii

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FINANCIAL COMPILATION

AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2012 (SEE ACCOUNTANTS’ COMPILATION REPORT) ASSETS CURRENT ASSETS Cash and cash equivalents INVESTMENTS OTHER ASSETS Deposits Total assets LIABILITIES AND NET ASSETS LIABILITIES NET ASSETS Unrestricted net assets: Designated by the Board of Trustees: Endowment Fund Metzger Fund Woodward Fund Undesignated Total unrestricted net assets Temporarily restricted net assets Permanently restricted net assets Total net assets Total liabilities and net assets The accompanying notes are an integral part of this statement.

$ 8,706 507,487 7,000 $523,193 $

851

151,895 45,233 61,836 41,567 353,677 88,665 80,000 522,342 $523,193

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FINANCIAL COMPILATION

AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA STATEMENT OE ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2012 (SEE ACCOUNTANTS’ COMPILATION REPORT) Unrestricted REVENUES AND SUPPORT Contributions Dues Emeritus dues Book sales Registration and conference fees Royalty income Net investment return Net assets released from restrictions Total revenues and support EXPENSES Program services: Meeting expenses Total program services Support services: Administrative fees Professional fees Office supplies and postage Website expenses Secretarial support Archive expense Total support services Total expenses CHANGE IN NET ASSETS Net assets - beginning of period Net assets - end of period

$

3,385 55,610 3,960 568 132,000 84 39,941 235,548 11,211 246,759

Temporarily Restricted

Permanently Restricted

$

$

18,940 18,940 (11,211) 7,729

1,600 1,600 1,600

Total

$

3,385 55,610 3,960 568 132,000 84 60,481 256,088 256,088

185,206 185,206

-

-

185,206 185,206

10,500 2,250 1,697 500 1,243 1,544 17,734 202,940 43,819 309,858 $353,677

7,729 80,936 $ 88,665

1,600 78,400 $80,000

10,500 2,250 1,697 500 1,243 1,544 17,734 202,940 53,148 469,194 $522,342

The accompanying notes are an integral part of this statement.

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FINANCIAL COMPILATION

AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA STATEMENT OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2012 (SEE ACCOUNTANTS’ COMPILATION REPORT) CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities: Realized gains on investments - net Unrealized gains on investments - net Decrease in receivable Increase in deposits Increase in payable Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investments Net cash used in investing activities Net change in cash and cash equivalents Cash and cash equivalents - beginning of period Cash and cash equivalents - end of period

$ 53,148

(773) (47,882) 5,690 (2,500) 687 8,370 (11,806) (11,806) (3,436) 12,142 $ 8,706

The accompanying notes are an integral part of this statement.

AMERICAN CLINICAL AND CLIMATOLOGIGAL ASSOCIATION NOTES TO FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies Organization and Nature of Activities The American Clinical and Climatological Association (the Association) is a non-profit organization which provides an annual forum for the exchange of scientific information between involved professionals from many sectors of the medical community, including representatives from the practicing sector, academic medicine, medical research, national physicians’ organizations, national educational organizations and various medically-involved governmental agencies. Presentations of these annual proceedings are published worldwide. Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles

FINANCIAL COMPILATION

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generally accepted in the Unites States of America (GAAP), which is contained in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). Financial Statement Presentation The Association is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets. Temporarily restricted net assets are those whose use by the Association has been limited by donors to a specific time period or purpose. Permanently restricted net assets have been restricted by donors to be maintained by the Association in perpetuity. Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid investments which are readily convertible into cash within ninety (90) days or less from the date of purchase and consist of demand deposits and money market accounts. Support and Revenue The Association receives its support primarily from active member dues and returns on investments. Additional revenue is received from emeritus dues and outside book sales. Investments Investments are carried at estimated fair value. Investment returns are allocated based on the average balances of the individual funds. Allocated investment returns include interest income, dividends, realized gains and losses and unrealized gains and losses. Deposits Deposits represent prepayments to vendors for future rental of meeting facilities. Contributions Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence or nature of any donor restrictions. All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. When a donor restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished),

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FINANCIAL COMPILATION

temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Income Taxes The Association was organized exclusively for education and scientific purposes and is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code and, therefore, has made no provision for federal income taxes in the accompanying financial statements. The Association adopted the accounting guidance related to accounting for uncertainty in income taxes which sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions. The statute of limitations for the examination of the Association’s income tax returns is generally three years from the due date of the tax return, including extensions. The federal tax years open for assessment are years ending on or after December 31, 2009. Designated Funds If the Board of Trustees (the Board) specifies a purpose where none has been stated by the original donor, such funds are classified as designated funds. Since these funds resulted from an internal designation and are not donor-restricted, they are classified and reported as unrestricted net assets. Also, see Note 4. The Board has designated funds for the following purposes: • Endowment Fund - established to account for undesignated contributions received by the Association. Use of the resources is determined annually by the Board. • Metzger Fund - established in 1960 to be used for purposes considered worthwhile by the Board, generally for expenses incurred by lecturers. • Woodward Fund - established in 1993 by a gift from Theodore Woodward. The unrestricted funds will be used to pay for an annual award to the lecturer with the best presentation of clinical skills.

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FINANCIAL COMPILATION

AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA NOTES TO FINANCIAL STATEMENTS 2. Investments Investments at December 31, 2012, are summarized as follows:

Mutual funds: American Funds: Washington Mutual Investors Fund Bond Fund of America New Perspective Fund Small Cap World Capital Income Builder Cap World Bond Fund Capital World Growth and Income Fundamental Investors Growth Fund of America Income Fund of America American Balanced Fund Total investments

Cost

Unrealized (Depreciation) Appreciation

Estimated Fair Value

$ 20,691 61,370 29,404 50,804 51,236 36,290 8,428 34,398 39,349 56,952 63,862 $452,784

$ 2,216 12,559 2,509 2,091 343 3,713 (95) 692 1,546 (3,839) 32,968 $54,703

$ 22,907 73,929 31,913 52,895 51,579 40,003 8,333 35,090 40,895 53,113 96,830 $507,487

The following schedule summarizes the net investment return and its classification in the statement of activities for the year ended December 31, 2012:

Interest and dividends Realized gains (losses) on investments - net Unrealized gains (losses) - net Net investment return

Unrestricted

Temporarily Restricted

Permanently Restricted

Total

$ 7,810 511

$ 3,703 242

$ 313 20

$11,826 773

31,620

14,995

1,267

47,882

$39,941

$18,940

$1,600

$60,481

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FINANCIAL COMPILATION

3. Fair Value Measurements The Association uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer of a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date. Fair value is best determined based upon quoted market prices. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. GAAP also establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. These levels are as follows: • Level I - Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include investment securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. • Level 2 - Valuation is based on inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. • Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation. The Association’s investments consist of mutual funds, which are measured at fair value on a recurring basis according to quoted market

FINANCIAL COMPILATION

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prices available from actively traded exchanges and, therefore, meet Level 1 criteria. 4. Endowed Net Assets The Association’s endowed net assets consist of individual funds established for a variety of purposes. Endowed net assets include both donor-restricted endowment funds and funds designated by the Board of Trustees to function as endowments (See Note 1). As required by GAAP, net assets associated with endowment funds, including funds designated by the Board of Trustees to function as endowments, are classified and reported based on the existence or absence of donorimposed restrictions. The Wilson Fund was established in 1936 to be used for the expenses for the Gordon Wilson Lectureship. Expenses include honorarium and travel expenses of the lecturer. Temporarily restricted funds received are for specific purposes and are released from restriction when that particular need or program occurs. In January 2009, the Association received donor-restricted funds in the amount of $75,000, establishing the Bert and Peggy DuPont Lecture Endowment Fund (the DuPont Fund), to remain in perpetuity. The annual spending allocation, which is restricted to 5 percent, can be used in support of an annual lecture or for support of the Association’s expenses. The DuPont Fund’s spending policy dictates that no portion of the inflation-adjusted corpus calculated on an annual basis, as defined by the donors, is to be allocated for spending. The amounts in excess of the inflation-adjusted corpus which are allocated to the DuPont Fund are classified as temporarily restricted net assets and may be subject to the annual spending allocation. The Association has established investment and spending policies with the objective of maintaining the purchasing power of its assets and to provide a stable level of support. The Association has a diversified investment allocation that places emphasis on equitybased investments to achieve its longterm return objectives, through both capital appreciation (realized and unrealized) and current yield (interest and dividends). To achieve these objectives, the Association’s investment allocation strategy is reviewed periodically and adjusted to target a total return that covers inflation, administrative expenses, and spending allocations, while minimizing volatility. Changes in endowed net assets for the year ended December 31, 2012 were as follows:

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Endowment net assets, beginning of year Contributions Investment returns: Investment income (loss) Net appreciation (depreciation) Other revenues and support Appropriation of endowment assets for expenditure Endowment net assets, end of year Donor-restricted endowment Board-designatred endowment Total

FINANCIAL COMPILATION Unrestricted (Endowment, Metzger, Woodward)

Temporarily Restricted (Wilson, DuPont)

Permanently Restricted (DuPont)

Total

$ 226,880

$ 80,936

$78,400

$ 386,216

2,471

-

-

6,074

3,946

333

10,353

23,083

14,994

1,267

39,344

140,322

2,471

-

-

140,322

共139,866兲

共11,211兲

-

共151,077兲

$ 258,964

$ 88,665

$80,000

$ 427,629

$

-

$ 88,665

$80,000

$ 168,665

258,964

-

-

$ 88,665

$80,000

$ 258,964

258,964 $ 427,629

5. Subsequent Events The Association has evaluated subsequent events through the date that the financial statements were available to be issued, March 4, 2013, and determined that no events occurred that required additional disclosure. No events occurring after this date have been evaluated for inclusion in these financial statements.

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FINANCIAL COMPILATION

AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA SUPPLEMENTARY INFORMATION SCHEDULE OF CASH AND INVESTMENTS DECEMBER 31, 2012 (SEE ACCOUNTANTS’ COMPILATION REPORT)

Operating Endowment Metzger Woodward Fund Fund Fund Fund

Wilson Fund

DuPont Fund

Total All Funds

CASH AND CASH EQUIVALENTS Merrill Lynch Bank USA Total

$ 8,706

$

-

$

-

$

-

$

-

$

-

$

8,706

$ 8,706

$

-

$

-

$

-

$

-

$

-

$

8,706

INVESTMENTS (AT ESTIMATED FAIR VALUE) Shares Washington Mutual Investors Fund

733.960

$ 3,605

6,856

$ 2,042

$ 2,791

$ 3,048

4,565

$ 22,907

Bond Fund of America

5708.855

11,634

$

22,128

6,589

9,008

9,837

$

14,733

73,929

New Perspective Fund

1020.893

5,022

9,552

2,844

3,889

4,246

6,360

31,913

Small Cap World

1325.354

8,324

15,832

4,715

6,445

7,038

10,541

52,895

Capital Income Builder

977.442

8,117

15,438

4,597

6,285

6,863

10,279

51,579

Cap World Bond Fund

1886.932

6,295

11,973

3,566

4,874

5,323

7,972

40,003

Capital World Growth and Income

224.041

1,311

2,494

743

1,015

1,109

1,661

8,333

Fundamental Investors

860.445

5,522

10,502

3,128

4,276

4,669

6,993

35,090 40,895

Growth Fund of America

1190.529

6,435

12,240

3,645

4,983

5,442

8,150

Income Fund of America

2940.849

8,358

15,897

4,734

6,472

7,067

10,585

53,113

American Balanced Fund

4746.570

15,237

28,982

8,631

11,798

12,885

19,297

96,830

$79,860

$151,894

$45,234

$61,836

$67,527

$101,136

$507,487

Total

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FINANCIAL COMPILATION

AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA SUPPLEMENTARY INFORMATION SCHEDULE OF MEETING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2012 (SEE ACCOUNTANTS’ COMPILATION REPORT) Banquet charges Audio visual Band and florist Travel expenses Printing Publishing Honoraria Awards Liability coverage

$117,357 7,010 3,497 21,837 1,832 21,601 10,250 1,383 439 $185,206

Accountants' compilation report to the board of trustees: American Clinical and Climatological Association, Baton Rouge, Louisiana.

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