Notes to SEFA
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Accounting Policies: FINANCIAL STATEMENT PRESENTATION The accompanying financial statements are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. Net assets, revenues, expenses, gains, and losses are classified based on the existence or absence of donor imposed restrictions. Accordingly, net assets of the Foundation and changes therein are classified and reported as follows: Net Assets Without Donor Restrictions: Net assets available for use in general operations and not subject to donor (or certain grantor) restrictions.Net Assets With Donor Restrictions: Net assets subject to donor (or certain grantor) imposed restrictions. Some donor imposed restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor imposed restrictions are perpetual in nature, where the donor stipulates that resources be maintained in perpetuity. Donor imposed restrictions are released when a restriction expires, that is when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both. ESTIMATES The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. INCOME TAXES The Foundation is an organization exempt from federal income taxes under IRS Code Section 501(c)(3). Unrelated business income, of which the Foundation had no significant amounts for the year ended 30 September 2022, is subject to federal income taxes and franchise fees. Accordingly, there is no provision made for federal income or franchise taxes in the accompanying financial statements as well as no uncertain tax positions as of year-end. FEDERAL AWARDS RECEIVABLE Federal awards receivable are considered fully collectible and are due within the next fiscal year. An allowance for doubtful accounts has not been recorded as of year-end. The Foundation considers creditworthiness, collection history, and aging of accounts when evaluating collectibility on an individual basis. FEDERAL AWARDS A significant portion of the Foundation's revenue is derived from federal grants, which are conditioned upon certain performance requirements and/or the incurrence of allowable qualifying expenses. Amounts received under these conditional contributions are recognized as revenue when the Foundation has incurred expenditures in compliance with specific contract or grant provisions. The Foundation has contracts for $5,192,324 for which qualifying expenditures have not been incurred and accordingly have not been recognized. EVENT AUCTION PROCEEDS The Foundation recognizes horse auction proceeds at the point in time after the sale has occurred, and its performance obligation has been met when horse ownership has been transferred to the winning bidder in exchange for the agreed upon rate. Payment is due on the day the auction takes place. In relation to auction proceeds, as of 30 September 2022 and 2021 there were no contract receivables, contract assets, contract liabilities, or any other variable considerations or related obligations.
De Minimis Rate Used: Y
Rate Explanation: The auditee used the 10% de minimis indirect cost rate.
EVENT TICKETS AND MERCHANDISE SALES The Foundation recognizes the income from event tickets and merchandise sales at the point in time when control of the promised good or service is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for the performance obligation. For event tickets, revenue is considered earned on the date of the event. Income from merchandise sales is considered earned on the date of the sale and when ownership of the merchandise passes to the customer in exchange for the agreed upon exchange rate. Payment is due at the date of the merchandise sale or event. As of 30 September 2022 and 2021 there were no contract receivables, contract assets, contract liabilities, or any other variable considerations or related obligations. INVESTMENTS Investments in mutual funds and marketable securities have readily determinable fair values and are based on quoted market values. Investment income and unrealized gains and losses are reported as increases in net assets without donor restrictions unless the donor has placed restrictions on the income's use. CONTRIBUTIONS Contributions received (including unconditional contributions) are recorded as support without restrictions or support with restrictions in the period received depending on the existence and/or nature of any donor restrictions. Contributions received with donor imposed restrictions that are satisfied in the same reporting period are reported as without donor restrictions on the statements of activities. Conditional promises to give, that is, those with a measurable performance or other barrier, and a right of return or right of release, are not recognized until the conditions on which they depend have been substantially met. The Foundation records donated assets at their estimated fair values at the date of receipt. Contributions of land, buildings, and equipment are recorded without donor restrictions, unless explicit donor stipulations specify how the donated assets must be used. Gifts of assets with explicit restrictions that specify how the assets are to be used are accounted for as net assets with donor restrictions. The Foundation reports expirations of donor restrictions when the donated or acquired long-lived assets are placed in service. SUBSEQUENT EVENTS The Foundation has evaluated subsequent events for disclosure through the date of the Independent Auditor's Report, the date the financial statements were available to be issued. FUNCTIONAL ALLOCATION OF EXPENSES The financial statements report certain categories of expenses that are attributed to more than one program or supporting function. Therefore, some expenses require allocation on a reasonable basis that is consistently applied. Personnel expenses are allocated based upon staff time devoted to each function. Event costs, professional fees, advertising, office, travel, and other expenses are allocated based on management's knowledge and review of individual transactions.