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Children's AdvoCacy Center of Paris Notes to Financial Statements December 31, 2002 NOTE 1--NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICrFS Nah~re nf Activifie~ The Children's Advocacy Center of Paris (the Organization) was formed in 1998 as a nonp¥ofit organization with a mission to protect and promote the healing of child abuse victims. The Organization works in conjunction with local law enforcement, child protective services, .and the county attorney's office to provide a child'~endly location for these victims. The Organization is supported primarily by grants and donatiofis from the public. Ra~ nf' Aeanlmtin~ The financial statements of the Organization have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities. Financ.~a! ,qtate, rnen~' Pre.~entat~nn The Organization has adopted Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS No. 117, the organization 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. In addition, the Organization is required to present a statement of cash flows. ! lse of' ~tlrn~te~ The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Prnperty and l;.ql]ipment It is the Organization's policy to capitalize property and equipment over $1,000. Lesser amounts are expensed. Purchased property and equipment is capitalized at cost. Donations of property and equipment are recorded as support at the estimated fair value. Such donations are reported as unrestricted support unless the donor has restricted the donated asset to a specific purpose. Assets donated with explicit restrictions regarding their use and contributions of cash ;that must be used to acquire property and equipment are reported as restricted or temporarily restricted support. Absent donor stipulations regarding how long those donated assets must be maintained, the Organization reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Organi~_ation reclassifies temporarily restricted net assets to unrestricted net assets at that time.