FINANCIAL COMPILATION Transactions of the American Clinical and Climatological Association, Vol. 127, 2016
Accountants’ Compilation Report The Board of Trustees American Clinical and Climatological Association
We have compiled the accompanying statement of financial position of the American Clinical and Climatological Association (a nonprofit organization) as of December 31, 2014, 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 October 20, 2015 lxviii
BK-ACC-ACCA_2016-160073-FM.indd 68
8/9/2016 2:22:18 PM
lxix
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2014 (SEE ACCOUNTANTS’ COMPILATION REPORT) ASSETS CURRENT ASSETS Receivable for overpayment from hotel
$
5,331
INVESTMENTS 615,910 Total assets
$ 621,241 LIABILITIES AND NET ASSETS
LIABILITIES Disbursements in excess of cash balances Accounts payable Total liabilities
$
4,048 187 4,235
NET ASSETS Unrestricted net assets: Designated by the Board of Trustees: Endowment Fund 184,272 Metzger Fund 51,744 Woodward Fund 75,016 Undesignated 114,901 Total unrestricted net assets 425,933 Temporarily restricted net assets
108,607
Permanently restricted net assets
82,466
Total net assets Total liabilities and net assets
617,006 $ 621,241
The accompanying notes are an integral part of this statement.
BK-ACC-ACCA_2016-160073-FM.indd 69
8/9/2016 2:22:18 PM
lxx
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2014 (SEE ACCOUNTANTS’ COMPILATION REPORT) Temporarily Permanently Unrestricted Restricted Restricted REVENUES AND SUPPORT Dues and other support Registration and conference fees Net investment return Net assets released from purpose restrictions Total revenues and support EXPENSES Program services: Meeting expenses Total program services Support services: Administrative support Professional fees Office supplies and postage Archive expense Total support services Total expenses CHANGE IN NET ASSETS Net assets - beginning of period Net assets - end of period
$ 74,226 141,900 25,667 241,803
$
- - 10,876 10,876
11,393 253,196
(11,393) (517)
208,608 208,608
- -
11,520 2,700 3,624 1,473 19,317 227,925 25,271 400,662 $ 425,933
- - - - - - (517) 109,124 $ 108,607
$
- - 1,316 1,316 - 1,316
- - - - - - - - 1,316 81,150 $ 82,466
Total
$ 74,226 141,900 37,869 253,995 253,995
208,608 208,608 11,520 2,700 3,624 1,473 19,317 227,925 26,070 590,936 $ 617,006
The accompanying notes are an integral part of this statement.
BK-ACC-ACCA_2016-160073-FM.indd 70
8/9/2016 2:22:18 PM
lxxi
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2014 (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 losses on investments - net Unrealized gains on investments - net Decrease in receivable Decrease in deposits Decrease in payable Net cash provided by operating activities
$ 26,070 104 (2,271) 6,704 2,000 (1,523) 31,084
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments Purchases of investments Net cash used in investing activities
5,827 (41,627) (35,800)
CASH FLOWS FROM FINANCING ACTIVITIES Disbursements in excess of cash balances Net cash provided by financing activities Net change in cash and cash equivalents Cash and cash equivalents - beginning of year Cash and cash equivalents - end of year
4,048 4,048 (668) 668 $ -
The accompanying notes are an integral part of this statement.
BK-ACC-ACCA_2016-160073-FM.indd 71
8/9/2016 2:22:18 PM
lxxii
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA 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 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.
BK-ACC-ACCA_2016-160073-FM.indd 72
8/9/2016 2:22:18 PM
FINANCIAL COMPILATION
lxxiii
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. 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), 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 50I(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 tax returns is generally three years from the due date of the tax return, including extensions.
BK-ACC-ACCA_2016-160073-FM.indd 73
8/9/2016 2:22:18 PM
lxxiv
FINANCIAL COMPILATION
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. 2. Investments Investments at December 31, 2014, are summarized as follows: Unrealized Estimated Cost Appreciation Fair Value 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
$ 18,794 $ 6,592 $ 25,386 64,535 11,797 76,332 30,111 6,292 36,403 57,331 8,040 65,371 64,521 7,039 71,560 36,380 1,045 37,425 7,629 1,572 9,201 31,451 8,326 39,777 39,625 9,662 49,287 69,341 7,526 76,867 74,575 53,726 128,301 $ 494,293 $ 121,617 $ 615,910
The following schedule summarizes the net investment return and its classification in the statement of activities for the year ended December 31, 2014:
BK-ACC-ACCA_2016-160073-FM.indd 74
8/9/2016 2:22:18 PM
lxxv
FINANCIAL COMPILATION Temporarily Permanently Unrestricted Restricted Restricted Interest and dividends Realized losses on investments - net
$ 24,207 (70)
$ 10,254
$ 1,241
Total $ 35,702
(30)
(4)
Unrealized gains - net
1,540
652
79
2,271
(104)
Net investment return
$ 25,677
$ 10,876
$ 1,316
$ 37,869
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 1 — 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 l 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 corrobo-
BK-ACC-ACCA_2016-160073-FM.indd 75
8/9/2016 2:22:18 PM
lxxvi
FINANCIAL COMPILATION
rated 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 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.
BK-ACC-ACCA_2016-160073-FM.indd 76
8/9/2016 2:22:18 PM
lxxvii
FINANCIAL COMPILATION
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 equity-based investments to achieve its long-term 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, 2014 were as follows: Unrestricted Temporarily (Endowment, Restricted Permanently Metzger, (Wilson, Restricted Woodward) DuPont) (DuPont) Endowment net assets, beginning of year Investment returns: Investment income Net appreciation Other revenues and support Appropriation of endowment assets for expenditure Endowment net assets, end of year Donor-restricted endowment Board-designated endowment Total
Total
$ 292,831
$ 109,124
$ 81,150
$ 483,105
17,619 1,125 157,772
10,225 651 -
1,237 79 -
29,081 1,855 157,772
(158,315) $ 311,032 $ 311,032 $ 311,032
(11,393) $ 108,607 $ 108,607 $ 108,607
$ 82,466 $ 82,466 $ 82,466
(169,708) $ 502,105 $ 191,073 311,032 $ 502,105
5. Temporarily Restricted Net Assets Temporarily restricted net assets at December 31, 2014, and net assets released from donor restrictions by satisfaction of the restricted purposes specified by the donors during the year ended December 31, 2014, were as follows: Temporarily Restricted Net Assets DuPont Fund Wilson Fund
BK-ACC-ACCA_2016-160073-FM.indd 77
$ 32,164
Released from Donor Restrictions $ 4,123
76,443
7,270
$ 108,607
$ 11,393
8/9/2016 2:22:19 PM
lxxviii
FINANCIAL COMPILATION
6. Subseouent Events The Association has evaluated subsequent events through the date that the financial statements were available to be issued, October 20, 2015, 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.
BK-ACC-ACCA_2016-160073-FM.indd 78
8/9/2016 2:22:19 PM
lxxix
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA SUPPLEMENTARY INFORMATION SCHEDULE OF CASH AND INVESTMENTS (DECEMBER 31, 2014) (SEE ACCOUNTANTS’ COMPILATION REPORT)
Operating Fund
Endowment Fund
Metzger Fund
Woodward Fund
Wilson Fund
DuPont Fund
Total All Funds
INVESTMENTS (AT ESTIMATED FAIR VALUE) Shares Washington Mutual Investors Fund
7,595
$ 2,133
$ 3,092
$ 3,151
4,725
$ 25,386
Bond Fund of America 5,958.787
619.940
$
14,104
4,690
$
22,837
6,413
9,297
9,474
$
14,207
76,332
New Perspective Fund 1,003.403
6,728
10,891
3,057
4,434
4,518
6,775
36,403
Small Cap World
1,442.762
12,078
19,558
5,492
7,962
8,114
12,167
65,371
Capital Income Builder
1,201.069
13,222
21,410
6,012
8,716
8,882
13,318
71,560
Cap World Bond Fund 1,885.386
6,917
11,197
3,144
4,557
4,645
6,965
37,425
Capital World Growth and Income
199.621
1,700
2,753
773
1,121
1,142
1,712
9,201
Fundamental Investors
764.059
7,349
11,901
3,342
4,845
4,937
7,403
39,777
Growth Fund of America
1,154.794
9,107
14,746
4,141
6,003
6,117
9,173
49,287
Income Fund of America
3,561.966
14,203
22,998
6,458
9,362
9,540
14,306
76,867
American Balanced Fund
5,183.868
Total
BK-ACC-ACCA_2016-160073-FM.indd 79
23,707
38,386
10,779
15,627
15,924
23,878
128,301
$ 113,805
$ 184,272
$ 51,744
$ 75,016
$ 76,444
$ 114,629
$ 615,910
8/9/2016 2:22:19 PM
lxxx
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA SUPPLEMENTARY INFORMATION SCHEDULE OF MEETING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2014 (SEE ACCOUNTANTS’ COMPILATION REPORT)
Banquet charges Audio visual and internet Meeting and Travel expenses Printing Publishing Awards
BK-ACC-ACCA_2016-160073-FM.indd 80
$ 127,620 10,948 35,092 1,466 31,910 1,572 $ 208,608
8/9/2016 2:22:19 PM
Accountants’ Compilation Report The Board of Trustees American Clinical and Climatological Association
We have compiled the accompanying statement of financial position of the American Clinical and Climatological Association (a nonprofit organization) as of December 31, 2014, 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 October 20, 2015 lxviii
BK-ACC-ACCA_2016-160073-FM.indd 68
8/9/2016 2:22:18 PM
lxix
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2014 (SEE ACCOUNTANTS’ COMPILATION REPORT) ASSETS CURRENT ASSETS Receivable for overpayment from hotel
$
5,331
INVESTMENTS 615,910 Total assets
$ 621,241 LIABILITIES AND NET ASSETS
LIABILITIES Disbursements in excess of cash balances Accounts payable Total liabilities
$
4,048 187 4,235
NET ASSETS Unrestricted net assets: Designated by the Board of Trustees: Endowment Fund 184,272 Metzger Fund 51,744 Woodward Fund 75,016 Undesignated 114,901 Total unrestricted net assets 425,933 Temporarily restricted net assets
108,607
Permanently restricted net assets
82,466
Total net assets Total liabilities and net assets
617,006 $ 621,241
The accompanying notes are an integral part of this statement.
BK-ACC-ACCA_2016-160073-FM.indd 69
8/9/2016 2:22:18 PM
lxx
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2014 (SEE ACCOUNTANTS’ COMPILATION REPORT) Temporarily Permanently Unrestricted Restricted Restricted REVENUES AND SUPPORT Dues and other support Registration and conference fees Net investment return Net assets released from purpose restrictions Total revenues and support EXPENSES Program services: Meeting expenses Total program services Support services: Administrative support Professional fees Office supplies and postage Archive expense Total support services Total expenses CHANGE IN NET ASSETS Net assets - beginning of period Net assets - end of period
$ 74,226 141,900 25,667 241,803
$
- - 10,876 10,876
11,393 253,196
(11,393) (517)
208,608 208,608
- -
11,520 2,700 3,624 1,473 19,317 227,925 25,271 400,662 $ 425,933
- - - - - - (517) 109,124 $ 108,607
$
- - 1,316 1,316 - 1,316
- - - - - - - - 1,316 81,150 $ 82,466
Total
$ 74,226 141,900 37,869 253,995 253,995
208,608 208,608 11,520 2,700 3,624 1,473 19,317 227,925 26,070 590,936 $ 617,006
The accompanying notes are an integral part of this statement.
BK-ACC-ACCA_2016-160073-FM.indd 70
8/9/2016 2:22:18 PM
lxxi
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2014 (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 losses on investments - net Unrealized gains on investments - net Decrease in receivable Decrease in deposits Decrease in payable Net cash provided by operating activities
$ 26,070 104 (2,271) 6,704 2,000 (1,523) 31,084
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of investments Purchases of investments Net cash used in investing activities
5,827 (41,627) (35,800)
CASH FLOWS FROM FINANCING ACTIVITIES Disbursements in excess of cash balances Net cash provided by financing activities Net change in cash and cash equivalents Cash and cash equivalents - beginning of year Cash and cash equivalents - end of year
4,048 4,048 (668) 668 $ -
The accompanying notes are an integral part of this statement.
BK-ACC-ACCA_2016-160073-FM.indd 71
8/9/2016 2:22:18 PM
lxxii
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA 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 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.
BK-ACC-ACCA_2016-160073-FM.indd 72
8/9/2016 2:22:18 PM
FINANCIAL COMPILATION
lxxiii
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. 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), 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 50I(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 tax returns is generally three years from the due date of the tax return, including extensions.
BK-ACC-ACCA_2016-160073-FM.indd 73
8/9/2016 2:22:18 PM
lxxiv
FINANCIAL COMPILATION
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. 2. Investments Investments at December 31, 2014, are summarized as follows: Unrealized Estimated Cost Appreciation Fair Value 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
$ 18,794 $ 6,592 $ 25,386 64,535 11,797 76,332 30,111 6,292 36,403 57,331 8,040 65,371 64,521 7,039 71,560 36,380 1,045 37,425 7,629 1,572 9,201 31,451 8,326 39,777 39,625 9,662 49,287 69,341 7,526 76,867 74,575 53,726 128,301 $ 494,293 $ 121,617 $ 615,910
The following schedule summarizes the net investment return and its classification in the statement of activities for the year ended December 31, 2014:
BK-ACC-ACCA_2016-160073-FM.indd 74
8/9/2016 2:22:18 PM
lxxv
FINANCIAL COMPILATION Temporarily Permanently Unrestricted Restricted Restricted Interest and dividends Realized losses on investments - net
$ 24,207 (70)
$ 10,254
$ 1,241
Total $ 35,702
(30)
(4)
Unrealized gains - net
1,540
652
79
2,271
(104)
Net investment return
$ 25,677
$ 10,876
$ 1,316
$ 37,869
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 1 — 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 l 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 corrobo-
BK-ACC-ACCA_2016-160073-FM.indd 75
8/9/2016 2:22:18 PM
lxxvi
FINANCIAL COMPILATION
rated 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 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.
BK-ACC-ACCA_2016-160073-FM.indd 76
8/9/2016 2:22:18 PM
lxxvii
FINANCIAL COMPILATION
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 equity-based investments to achieve its long-term 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, 2014 were as follows: Unrestricted Temporarily (Endowment, Restricted Permanently Metzger, (Wilson, Restricted Woodward) DuPont) (DuPont) Endowment net assets, beginning of year Investment returns: Investment income Net appreciation Other revenues and support Appropriation of endowment assets for expenditure Endowment net assets, end of year Donor-restricted endowment Board-designated endowment Total
Total
$ 292,831
$ 109,124
$ 81,150
$ 483,105
17,619 1,125 157,772
10,225 651 -
1,237 79 -
29,081 1,855 157,772
(158,315) $ 311,032 $ 311,032 $ 311,032
(11,393) $ 108,607 $ 108,607 $ 108,607
$ 82,466 $ 82,466 $ 82,466
(169,708) $ 502,105 $ 191,073 311,032 $ 502,105
5. Temporarily Restricted Net Assets Temporarily restricted net assets at December 31, 2014, and net assets released from donor restrictions by satisfaction of the restricted purposes specified by the donors during the year ended December 31, 2014, were as follows: Temporarily Restricted Net Assets DuPont Fund Wilson Fund
BK-ACC-ACCA_2016-160073-FM.indd 77
$ 32,164
Released from Donor Restrictions $ 4,123
76,443
7,270
$ 108,607
$ 11,393
8/9/2016 2:22:19 PM
lxxviii
FINANCIAL COMPILATION
6. Subseouent Events The Association has evaluated subsequent events through the date that the financial statements were available to be issued, October 20, 2015, 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.
BK-ACC-ACCA_2016-160073-FM.indd 78
8/9/2016 2:22:19 PM
lxxix
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA SUPPLEMENTARY INFORMATION SCHEDULE OF CASH AND INVESTMENTS (DECEMBER 31, 2014) (SEE ACCOUNTANTS’ COMPILATION REPORT)
Operating Fund
Endowment Fund
Metzger Fund
Woodward Fund
Wilson Fund
DuPont Fund
Total All Funds
INVESTMENTS (AT ESTIMATED FAIR VALUE) Shares Washington Mutual Investors Fund
7,595
$ 2,133
$ 3,092
$ 3,151
4,725
$ 25,386
Bond Fund of America 5,958.787
619.940
$
14,104
4,690
$
22,837
6,413
9,297
9,474
$
14,207
76,332
New Perspective Fund 1,003.403
6,728
10,891
3,057
4,434
4,518
6,775
36,403
Small Cap World
1,442.762
12,078
19,558
5,492
7,962
8,114
12,167
65,371
Capital Income Builder
1,201.069
13,222
21,410
6,012
8,716
8,882
13,318
71,560
Cap World Bond Fund 1,885.386
6,917
11,197
3,144
4,557
4,645
6,965
37,425
Capital World Growth and Income
199.621
1,700
2,753
773
1,121
1,142
1,712
9,201
Fundamental Investors
764.059
7,349
11,901
3,342
4,845
4,937
7,403
39,777
Growth Fund of America
1,154.794
9,107
14,746
4,141
6,003
6,117
9,173
49,287
Income Fund of America
3,561.966
14,203
22,998
6,458
9,362
9,540
14,306
76,867
American Balanced Fund
5,183.868
Total
BK-ACC-ACCA_2016-160073-FM.indd 79
23,707
38,386
10,779
15,627
15,924
23,878
128,301
$ 113,805
$ 184,272
$ 51,744
$ 75,016
$ 76,444
$ 114,629
$ 615,910
8/9/2016 2:22:19 PM
lxxx
FINANCIAL COMPILATION
AMERICAN CLINICAL AND CLIMATOLOGICAL ASSOCIATION BATON ROUGE, LOUISIANA SUPPLEMENTARY INFORMATION SCHEDULE OF MEETING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2014 (SEE ACCOUNTANTS’ COMPILATION REPORT)
Banquet charges Audio visual and internet Meeting and Travel expenses Printing Publishing Awards
BK-ACC-ACCA_2016-160073-FM.indd 80
$ 127,620 10,948 35,092 1,466 31,910 1,572 $ 208,608
8/9/2016 2:22:19 PM
