June 30, 2005 And 2004
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION -- The Music Library Association was formed in 1945 as a non-stock, non-profit corporation. The purposes of the Association are to promote the establishment, growth, and use of music libraries; to encourage the collection of music and musical literature in libraries; to further studies in musical bibliography; to increase efficiency in music library service and administration; and to promote the profession of music librarianship.
BASIS OF ACCOUNTING -- The Association's policy is to prepare its financial statements on the accrual basis of accounting. Revenues are recognized in the period in which they are earned. Expenses are recognized in the period in which the related liability is incurred.
The financial statements have been prepared in accordance with Statement of Financial Accounting Standards (SFAS) No. 116, Accounting for Contributions Received and Contributions Made. Under SFAS No. 116, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/or nature of any donor restrictions.
The financial statements have been prepared in accordance with Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS No. 117, 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. In addition, the Association is required to present a Statement of Cash Flows.
ACCOUNTS RECEIVABLE -- The Board is of the opinion that all of the Association's accounts receivable are fully collectable and no allowance for doubtful accounts is required.
INVESTMENTS IN MARKETABLE SECURITIES -- Investments in marketable securities are reported at fair value based on quoted market prices.
SUPPORT AND REVENUE -- Support and revenue are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Interest, dividends, gains and losses on investments are reported as increases or decreases in unrestricted net assets unless their use is restricted by explicit donor stipulation. Expirations of temporary restrictions on net assets are reported as reclassifications between the applicable classes of net assets. Contributions are recognized as revenue in the period that the contribution is received.
DONATED MATERIALS AND SERVICES -- Voluntary services and materials donated by individuals and institutions have not been reflected in the financial statements. The impact of those services upon the financial statements is unknown as there is no objective basis available to measure the value of such services.
PROPERTY AND EQUIPMENT -- Property and equipment are stated at cost. The cost of repairs and maintenance is charged to operations as incurred. Major renewals, betterments, and additions are capitalized. When assets are sold or otherwise disposed of, the cost of the asset and related accumulated depreciation are removed from the accounts and the resulting gain or loss is credited or charged to income.
Depreciation is computed using the following method over the estimated useful lives of the assets:
Class Method Computer Equipment Straight--Line
INCOME TAXES -- The Association is exempt from Federal and State income taxes under Intemal Revenue Code Section 501(c)(3). Therefore, no provisions have been made for income taxes in the financial statements.
STATEMENTS OF CASH FLOWS -- For the purpose of these statements, the Association considers all highly liquid investments available for current use to be cash equivalents.
INVENTORIES -- Inventories of musical publications produced for the Association are stated at the lower of cost or market determined by the first-in, first-out method.
ESTIMATES -- The preparation of financial statements in conformity with 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.
2. CASH AND INVESTMENTS
Cash and investments consisted of the following at June 30, 2005 and 2004:
2005 Cost Fair Value Cash $47,216 $47,216 Investments: Mutual Funds 440,871 525,652 Total Cash And Investments $488,087 $572,868 Investment earnings for the year consisted of the following: Dividends And Interest $12,741 Net Realized Gain On Investments 24,273 Net Unrealized Gain On Investments 14,575 Investment Eamings $51,589 2004 Cost Fair Value Cash $40,960 $40,960 Investments: Mutual Funds 446,071 492,002 Total Cash And Investments $487,031 $532,962 Investment earnings for the year consisted of the following: Dividends And Interest $15,641 Net Realized Gain On Investments 9,999 Net Unrealized Gain On Investments 39,986 Investment Eamings $65,626
3. PERMANENTLY RESTRICTED CASH AND INVESTMENTS IN MARKETABLE SECURITIES
Permanently restricted cash and investments in marketable securities represent contributions received in current and prior years restricted by donors to be invested and the principal to be held by the Association. These contributions are reported as permanently restricted net assets. A summary of permanently restricted cash and investments in marketable securities at June 30, 2005 and 2004, respectively, is as follows:
2005 2004 Cash And Cash Equivalents -- Permanently Restricted $2,713 $4,672 Investments In Marketable Securities -- Permanently Restricted 144,580 142,621 $147,293 $147,293
4. TEMPORARILY RESTRICTED CASH AND INVESTMENTS IN MARKETABLE SECURITIES
Temporarily restricted cash and investments in marketable securities represent contributions received in current and prior years restricted by donors to be used for awards and publications, and which are reported as temporarily restricted net assets. A summary of temporarily restricted cash and investments in marketable securities at June 30, 2005 and 2004, respectively, is as follows:
2005 2004 Cash And Cash Equivalents -- Temporarily Restricted $265,565 $380,308 Investments In Marketable Securities -- Temporarily Restricted 15,910 8,461 $281,475 $388,769
5. NET ASSETS RELEASED FROM DONOR RESTRICTIONS
During the years ended June 30, 2005 and 2004, the following net assets were released from donor restrictions by incurring expenses satisfying the restricted purposes specified by donors:
2005 2004 Payment Of Awards $5,350 $7,898 Restriction Released By Donor $- $2,000
6. MELLON GRANT PAYABLE
During June, 2004, the Association was given a $379,000 grant from The Andrew W. Mellon Foundation to support the development of an online catalog, the "Index to Printed Music: Collections and Series (IPM)". These funds will be disbursed by the Association to the James Adrian Music Company through August 31, 2007 for their work on this project as it progresses. Under the terms of the grant, the Association is required to submit annual progress summaries and financial reports to The Andrew T. Mellon Foundation, and will receive a $5,000 annual management fee to cover expenses generated in overseeing this project. Payments in the amount of $130,000 and $0 were paid to the James Adrian Music Company in the years ended June 30, 2005 and 2004, respectively.…