Accounting Policies: Note 1 - Nature of Lighthouse and Summary of Significant Accounting Policies: LightHouse for the Blind and Visually Impaired (Lighthouse), a California nonprofit public benefit corporation founded in 1902, provides a variety of programs to over 3,000 participants who are blind or visually impaired in San Francisco and throughout California. LightHouse is the sole owner of The Lighthouse Member LLC (LLC), and 1155 Market Street QALICB, (1155 Market) both California nonprofit corporations. 1155 Market Street QALICB owns the top three floors of the 1155 Market Street building and meets the criteria for consolidation for purposes of financial reporting. The Lighthouse Member LLC held, in partnership with Patson Companies, the lower eight floors of the 1155 Market Street building. The bottom eight floors of the building went into receivership during the year ended September 2024. Lighthouse receives support and revenue from a variety of sources. Following is a description of the programs and services of Lighthouse: Community and Information Services x Community Services offers social, health promotion and educational classes for the blind. Opportunities include yoga, dance, a book club, and many other programs. Cultural, artistic and fitness programs bring people together for social engagement and to build a community of low vision and blind people. x Blind teens find a place where blindness is normal at LightHouse Youth Programs. Activities include adventures in the great outdoors, volunteer service and mentorship opportunities. x A Counseling Services Program for the blind and low vision provides one-on-one counseling, peer counseling and group therapy sessions. Vision Rehabilitation Services x Blindness Skills provides instruction to people who are new to blindness or low vision to help them learn to use a white cane for mobility, read braille, utilize accessible technology and acquire adaptive methods for cooking and daily living. x The LightHouse’s Employment Immersion Program is a job training program specifically designed for blind and visually impaired jobseekers in the Bay Area. Our graduates have found jobs, starting them on a path of self-reliance and life fulfilment. x Enchanted Hills Camp for the Blind in Napa is one of the West’s only camps for blind, visually impaired, deaf-blind and multi-disabled youth, adults and seniors. Enchanted Hills Camp is a place for blind campers to explore and create, gain courage, try new things and make lifelong friends. Lighthouse for the Blind and Visually Impaired Notes to the Consolidated Financial Statements 9 x Deaf-Blind Services include communications equipment and training program that is open to deaf-blind individuals throughout the state. It also hosts a special Enchanted Hills Camp session specifically for the deaf-blind. LightHouse Enterprises x LightHouse operates Adaptations, a brick-and-mortar store selling blind adaptive technologies and tools, such as white canes, guide dog supplies, magnifiers, talking watches and other items. x LightHouse Industries provides direct employment at the Sirkin Lighthouse, our light manufacturing plant in Alameda where 75% or more of all direct labor is performed by blind or visually impaired employees. x The Media and Accessible Design Laboratory (MADLab) makes visual information accessible to people who are blind and visually impaired. The transcription team takes original copy and translates it into accessible formats, including braille, large print, and audio. An experienced team of braille certified tactile image and map designers helps corporate and governmental entities, educational institutions, and nonprofits improve the accessibility and inclusiveness of their venues and services as well as comply with ADA signage standards and state building codes. Basis of Presentation and Consolidation The consolidated financial statements include the financial statements of the Lighthouse and 1155 Market (known collectively as The Lighthouse). All material intercompany accounts and transactions have been eliminated. The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), applicable to nonprofit organizations. The Lighthouse presents information regarding its net assets and activities according to two classes of net assets. Net Assets Without Donor Restrictions - net assets that are not subject to donor- imposed stipulations. In addition, the Board has designated net assets of $95,024,432 that are not restricted by donors but set aside by the Board for specific uses, including subsidizing operations, capital improvements and program enhancements. Net Assets With Donor Restrictions - net assets that are subject to donor-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 because the donor stipulates that the principal be invested in perpetuity. The Lighthouse has no restrictions that are perpetual in nature. Lighthouse for the Blind and Visually Impaired Notes to the Consolidated Financial Statements 10 Recognition of Revenue Contributions are recognized at their fair value when the donor makes an unconditional promise to give to Lighthouse. Donor-restricted contributions are reported as increases in donor restricted net assets depending on the nature of the restrictions. When a restriction expires, net assets with restrictions are reclassified to net assets without restrictions. Unconditional promises to give that are expected to be collected within one year are recorded at net realizable value. Unconditional promises to give that are expected to be collected in future years are recorded at the present value of their estimated future cash flows. The discounts on those amounts are computed using market discount rates applicable to the years in which the promises are received. Amortization of the discounts is included in contribution revenue. Lighthouse uses the allowance method to determine uncollectible receivables. The allowance is based upon prior years’ experience and management’s analysis of specific promises made. Conditional promises to give - that is, those with a measurable performance or other barrier and a right of return - are not recognized until the conditions on which they depend have been met. Government grants A portion of Lighthouse’s revenue is derived from cost-reimbursable federal and state contracts, which are conditioned upon certain performance requirements and/ or incurring qualifying expenses. Amounts received are recognized as revenue when Lighthouse has incurred expenditures in compliance with specific contract or grant provisions. Amounts received prior to incurring qualifying expenditures are reported as deferred revenue in the Consolidated Statement of Financial Position. Sales Sales are recognized as revenue at the time the sale is completed. Program service fees Program service fees are recognized at the time the related service is provided to a client. Estimates The preparation of financial statements in conformity with U.S. GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Lighthouse for the Blind and Visually Impaired Notes to the Consolidated Financial Statements 11 Cash and Cash Equivalents For purposes of the Consolidated Statement of Cash Flows, cash is defined as cash in demand deposit accounts as well as cash on hand. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and investments so near their maturity that the risk of changes in value due to changes in interest rates is negligible. These are generally investments with maturity dates within three months of the acquisition date. Receivables Receivables are stated at the amount the Lighthouse’s management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to bad debt expense and a credit to an allowance account, based on its assessment of the current status of individual accounts. Lighthouse routinely reviews its receivables and makes provisions for the credit losses utilizing the Current Expected Credit Losses model (“CECL”). The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for receivables at the time the financial asset is originated or acquired. Management believes the entire balance of receivables is collectible, and therefore, no allowance was recorded as of September 30, 2024. Investments Investments in money market funds and mutual funds are carried at fair value based upon quoted market prices. Investments in privately held entities are carried at cost, which approximates fair value. Gains and losses that result from market fluctuations are recognized in the Consolidated Statement of Activities and Changes in Net Assets in the period such fluctuations occur. Dividend and interest income are accrued when earned. Investment fees and expenses reduce investment income recognized during the year. Investments in real estate are carried at cost or adjusted to current market value when a permanent impairment in value has been deemed to occur. Inventory Inventory items are held for sale or resale and are stated at the lower of cost or market value and determined on a first-in, first-out basis. Property and Equipment The Lighthouse records property, equipment, and improvements in excess of $5,000 at historical cost or, if donated, at fair market value at the date of donation. Depreciation is determined on the straight-line method over the estimated useful lives of the assets ranging from five to forty years. Lighthouse for the Blind and Visually Impaired Notes to the Consolidated Financial Statements 12 Functional Allocation of Expenses The Lighthouse allocated its expenses on a functional basis among its various programs and support services. Expenses that can be identified with a specific program or support service are allocated directly. Indirect costs are allocated among program and support services on a basis proportionate to the direct staff time or other method which best measures the relative degree of benefit. Income Taxes The Lighthouse is a tax-exempt organization under Internal Revenue Service Code (IRC) §501(c)(3) and the applicable section of the California Revenue and Taxation Code. Management evaluated the Lighthouse’s tax positions and concluded that the Lighthouse had maintained its tax-exempt status and had not taken uncertain tax positions that required adjustment to the consolidated financial statements. Therefore, no provision or liability for income taxes has been included in the consolidated financial statements. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Lighthouse classifies its financial assets and liabilities measured at fair value on a recurring basis based on a fair value hierarchy with three levels of inputs. Level 1 values are based on unadjusted quoted prices in active markets for identical securities. Level 2 values are based on significant observable market inputs, such as quoted prices for similar securities and quoted prices in inactive markets. Level 3 values are based on significant unobservable inputs that reflect the Lighthouse’s determination of assumptions that market participants might reasonably use in valuing the securities. The valuation levels are not necessarily an indication of the risk or liquidity associated with the assets and liabilities measured at fair value. Leases Operating right-of-use lease assets represent Lighthouse’s right to use an underlying asset during the lease term and operating lease liabilities represent Lighthouse’s obligation to make payments arising from the lease. Operating leases are recorded in operating right-of-use lease assets and operating lease liabilities on the Statement of Financial Position. Lighthouse does not have any financing leases. Operating right-of-use lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The discount rate used to derive the present value is based risk-free rate for a period comparable to the lease term. Renewal periods are included in calculating the present value of future lease payments when they are reasonably certain of exercise. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Lighthouse for the Blind and Visually Impaired Notes to the Consolidated Financial Statements 13 Recent Accounting Pronouncement Pronouncement Adopted: In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which created a new credit impairment standard for financial assets. The ASU requires financial assets, including loans and trade receivables, measured at amortized cost to be presented at the net amount expected to ultimately be collected. The allowance for credit losses includes all losses that are expected to occur over the remaining life of the asset, rather than incurred losses through the date of the financial statements. Changes in the allowance for credit losses are recorded in the Statement of Activities as the amounts expected to be collected change. Lighthouse adopted the new standard effective October 1, 2023. The adoption of this ASU did not have a material impact on the Lighthouse’s financial statements. Comparative Financial Statements The financial statements include certain prior year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with U.S. GAAP. Accordingly, such information should be read in conjunction with Lighthouse’s financial statements for the year ended September 30, 2023 from which the summarized information is derived. Subsequent Events Lighthouse has reviewed its subsequent events for the period of time from its fiscal year ended September 30, 2024 through June 26, 2025, the date the financial statements were available to be issued, and has determined that no adjustments are necessary to the amounts reported in the accompanying financial statements nor subsequent events have occurred, the nature of which would require disclosure excepted as noted in Note 13.
De Minimis Rate Used: N
Rate Explanation: Auditee doesn't have minimis cost rate