2010-102 RES PROFESSIONAL SERVICES - AMERICAN RED CROSS

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Americaii Recl Crass, Lamar Coiinty Ctiapter Notes to tlte Casli Basis Fiuaiicial Stateineiits Fo►• t1ie Year C►icled Julie 30, 2009 NOTE 1- SL1MMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of AccouiitiU The accompanying financial statements have been prepaced on the cash basis of accounting, which is a comprehensive basis of accotmting other than geiieraily accepted accounting principles. Consequently, contcibutions and ottiec revenLies are i•ecognized when received cather than when promised or earned, and ceitain expenses and purchases of assets are cecognized when cash is disbursed rather than wlien the obligation is inciu•red. The only asset recognized is cash, and no Iiabilities are recognized. Noncash tcansactions are not recogtiized in the fiiiancial statement. Income Taxes Tlie organization itself is Eiot a taxpaying eiltiry for purposes of federal and state income taxes. Instead, its financial activity is ceported as parf of tfie American Red Cross federa( reporting as a non-profit organization exempt fi•om federal income tax undec Sectia} 50 t(c)(3). Land Buildings and Equi mp ent (Fixed Assets) Asset acquisitions 1iave been expensed when purchased as a non-operatirig expeiase and are recorded oti the ftiancial statements, However, for fixed assets, sucli as land, bttildings, veliicles, office and equiprnent, records are maintained and depreciated (except for fand) by the ciiapte►• in accordance with procedtii•es and policies of American Red Cross. The American Red Cross requires ttie calctilation of depreciation an fixed tallgible assets with a utiit cost or donated value of $2,500 or moce attd an estiinated usefial life of ttu•ee or more years. Records ace retained by the chapter for all fiilly depreciated fixed assets unti( they ace no longer in ase aiid 4iave been satvaged or sold. [t is the chapter's poticy to depreciate its equipment at Lives ►•anging fi•om three to ten years, Financial Statement Presentation Non-pcofit organizations report iiet assets according to Tliree classes of net assets: unrestricted net assets, temporarify restricted net assets, and pecmanently restricted uet assets. Therefoc•e, the net assets of the chapter and chaiiges tlierein ace ciassified and repo►led as follows: Unre,sh•rcted Net Assets ace net assets that ace not subject to donor-iinposed stipulations.