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					                                                                                American Society of Interior
                                                                                Designers, Inc. and Affiliates

                                                                                Consolidating Financial Statements
                                                                                Year Ended September 30, 2012




The report accompanying these financial statements was issued by
BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of
BDO International Limited, a UK company limited by guarantee.
 American Society of Interior
 Designers, Inc. and Affiliates

Consolidating Financial Statements
    Year Ended September 30, 2012
         American Society of Interior Designers, Inc. and Affiliates
                                           Contents




Independent Auditors' Report                                              3

Consolidating Financial Statements

   Consolidating Statement of Financial Position                         4-5

   Consolidating Statement of Activities                                 6-7

   Consolidating Statement of Changes in Net Assets                       8

   Consolidating Statement of Cash Flows                                  9

   Notes to Consolidating Financial Statements                         10-26




                                                 2
    Consolidating
Financial Statements
                                 American Society of Interior Designers, Inc. and Affiliates
                                            Consolidating Statement of Financial Position

September 30,                                                                             2012
                                                   American Society      ASID               ASID
                                                      of Interior     Foundation,        Benevolent
                                                    Designers, Inc.       Inc.             Fund          Eliminations        Total
Assets
Current assets
   Cash and cash equivalents                        $      690,331    $       48,135    $           -    $          -   $     738,466
   Accounts receivable - trade, net of allowance
      for uncollectible amounts of $4,351                   66,644            65,361                -              -          132,005
   Accounts receivable - other                               9,312                 -                -              -            9,312
   Due from affiliates                                      22,510                 -                -        (22,510)               -
   Prepaid expenses                                         80,424               588                -              -           81,012
Total current assets                                       869,221           114,084                -        (22,510)         960,795

Noncurrent assets
   Investments                                            4,810,323        3,321,672         245,672                -        8,377,667
   Property and equipment, net                              812,741            3,176               -                -          815,917
   Property held for sale                                 2,487,098                -               -                -        2,487,098
Total noncurrent assets                                   8,110,162        3,324,848         245,672                -       11,680,682
Total assets                                        $     8,979,383   $    3,438,932    $    245,672     $   (22,510)   $ 12,641,477
                                                                          See accompanying notes to consolidating financial statements.




                                                                  4
                                   American Society of Interior Designers, Inc. and Affiliates
                                      Consolidating Statement of Financial Position - (continued)
September 30,                                                                               2012
                                                   American Society          ASID              ASID
                                                      of Interior         Foundation,       Benevolent
                                                    Designers, Inc.           Inc.             Fund        Eliminations        Total
Liabilities and Net Assets
Current liabilities
  Accounts payable and accrued expenses             $      333,406    $          7,586      $          -   $         -     $     340,992
  Due to chapters                                          259,394                   -                 -             -           259,394
  Funds held for chapters                                        -             338,369                 -             -           338,369
  Deferred revenue                                       1,535,157                   -                 -             -         1,535,157
  Due to affiliates                                              -              21,510             1,000       (22,510)                -
  Line-of-Credit                                           100,000                   -                 -             -           100,000
  Current maturities of long-term debt                     161,399                   -                 -             -           161,399
Total current liabilities                                2,389,356             367,465             1,000       (22,510)        2,735,311
Noncurrent liabilities
  Interest rate swap agreement                             441,565                      -              -              -          441,565
  Long-term debt, net of current portion                 1,722,382                      -              -              -        1,722,382
Total noncurrent liabilities                             2,163,947                      -              -              -        2,163,947
Total liabilities                                        4,553,303             367,465             1,000       (22,510)        4,899,258

Commitments and contingencies
Net assets
  Unrestricted (undesignated)                            4,426,080             388,287          244,672               -        5,059,039
  Temporarily restricted                                         -             788,180                -               -          788,180
  Permanently restricted                                         -           1,895,000                -               -        1,895,000
Total net assets                                         4,426,080           3,071,467          244,672               -        7,742,219
Total liabilities and net assets                    $    8,979,383    $      3,438,932      $   245,672    $   (22,510)    $ 12,641,477
                                                                            See accompanying notes to consolidating financial statements.




                                                                      5
                                                         American Society of Interior Designers, Inc. and Affiliates
                                                                        Consolidating Statement of Activities

Year ended September 30,                                                                                           2012

                                                                                       ASID Foundation, Inc.
                                                    American
                                                     Society                                                             Total                ASID
                                                    of Interior                    Temporarily      Permanently          ASID              Benevolent
                                                  Designers, Inc.   Unrestricted    Restricted       Restricted     Foundation, Inc.         Fund               Eliminations           Total
Revenue, Gains, and Other Support
  Membership dues and revenue, net of
     chapter allocation payments of $1,450,287    $    4,043,892    $          -   $            -   $          -    $             -    $                -   $                  -   $   4,043,892
  Industry partnership dues and revenue, net of
     chapter allocation payments of $409,426           1,614,236               -                -              -                  -                     -                      -       1,614,236
  Student membership dues and revenue, net of
     chapter allocation payments of $10,820              284,163               -             -                 -                  -                   -                     -            284,163
  Investment and interest income return                  761,755         325,906       146,596                 -            472,502              37,595                     -          1,271,852
  Education, meetings, and events                        166,752           8,061             -                 -              8,061                   -                     -            174,813
  Certificate programs                                         -           1,980             -                 -              1,980                   -                     -              1,980
  ASID Advantage                                          89,710               -             -                 -                  -                   -                     -             89,710
  Legislative and public affairs                         183,949               -             -                 -                  -                   -                     -            183,949
  Contributions                                                -         109,014             -                 -            109,014                   -               (50,000)            59,014
  Research and knowledge resources                       103,903               -             -                 -                  -                   -                     -            103,903
  Unrealized gain on interest rate swap                   17,791               -             -                 -                  -                   -                     -             17,791
  Other                                                   56,544               -             -                 -                  -                   -                     -             56,544
  Net assets released from restrictions:
     Satisfaction of program restrictions                       -        202,060       (202,060)               -                  -                     -                      -               -
Total revenue, gains, and other support           $    7,322,695    $    647,021   $    (55,464)    $          -    $       591,557    $         37,595     $         (50,000)     $   7,901,847
                                                                                                                                See accompanying notes to consolidating financial statements.




                                                                                            6
                                               American Society of Interior Designers, Inc. and Affiliates
                                                        Consolidating Statement of Activities - (continued)

Year ended September 30,                                                                                    2012

                                                                                    ASID Foundation, Inc.
                                              American Society                                                       Total             ASID
                                                 of Interior                    Temporarily    Permanently           ASID           Benevolent
                                               Designers, Inc.   Unrestricted    Restricted     Restricted      Foundation, Inc.       Fund        Eliminations         Total
Expenses
  Program services
     Meetings and events                       $     392,595     $         -    $         -    $            -      $           -    $         -    $          -    $     392,595
     Member development                              263,544               -              -                 -                  -              -               -          263,544
     Student and emerging professionals              286,825               -              -                 -                  -              -               -          286,825
     Strategic marketing and communications          436,981               -              -                 -                  -              -               -          436,981
     Research and knowledge resources                512,317               -              -                 -                  -              -               -          512,317
     Legislative and public affairs                  652,181               -              -                 -                  -              -               -          652,181
     Customer service                                484,591               -              -                 -                  -              -               -          484,591
     Education                                       676,217          29,989              -                 -             29,989              -               -          706,206
     Industry development                            268,046               -              -                 -                  -              -               -          268,046
     Chapter services                                434,289               -              -                 -                  -              -               -          434,289
     Support                                               -         211,682              -                 -            211,682          1,000               -          212,682
     ASID Advantage                                   55,696               -              -                 -                  -              -               -           55,696
  Total program services                           4,463,282         241,671              -                 -            241,671          1,000               -        4,705,953

  Supporting services
     Governance                                      412,771           19,620             -                 -             19,620               -             -           432,391
     Finance and administration                      891,538           26,870             -                 -             26,870               -             -           918,408
     Executive office                                337,251                -             -                 -                  -               -             -           337,251
     Information technology                          521,624                -             -                 -                  -               -             -           521,624
     Fundraising                                           -           14,671             -                 -             14,671               -             -            14,671
     Foundation                                       50,000                -             -                 -                  -               -       (50,000)                -
  Total supporting services                        2,213,184           61,161             -                 -             61,161               -       (50,000)        2,224,345
                                                                                                                                                                               -
Total expenses                                     6,676,466         302,832              -                 -            302,832          1,000        (50,000)        6,930,298

Change in net assets                           $     646,229     $   344,189    $   (55,464)   $            -      $     288,725    $    36,595    $          -    $    971,549
                                                                                                                   See accompanying notes to consolidating financial statements.




                                                                                    7
                                              American Society of Interior Designers, Inc. and Affiliates
                                                       Consolidating Statement of Changes in Net Assets

Year ended September 30, 2012
                                                                                                                        Temporarily      Permanently
                                                            Unrestricted                                                 Restricted       Restricted
                                   American           American
                                   Society of        Society of
                                    Interior           Interior           ASID              ASID                           ASID             ASID
                                 Designers, Inc.   Designers, Inc.     Foundation,       Benevolent       Total         Foundation,      Foundation,
                                 (Undesignated)     (Designated)           Inc.             Fund       Unrestricted         Inc.             Inc.              Total

Net assets, September 30, 2011   $     3,773,690   $        6,161     $      44,098      $   208,077   $   4,032,026    $    843,644    $   1,895,000      $   6,770,670

Change in net assets                     646,229                  -         344,189           36,595       1,027,013         (55,464)                  -         971,549

Transfers                                  6,161           (6,161)                   -             -               -                -                  -                -

Net assets, September 30, 2012   $     4,426,080   $          -       $     388,287      $   244,672   $   5,059,039    $    788,180    $   1,895,000      $   7,742,219
                                                                                                             See accompanying notes to consolidating financial statements.




                                                                                     8
                                       American Society of Interior Designers, Inc. and Affiliates
                                                      Consolidating Statement of Cash Flows

Year ended September 30,                                                                            2012
                                                             American Society       ASID             ASID
                                                                of Interior      Foundation,       Benevolent
                                                              Designers, Inc.        Inc.            Fund          Eliminations        Total
Cash flows from operating activities
   Change in net assets                                      $       646,229     $     288,725     $    36,595     $           -   $      971,549
   Adjustments to reconcile change in net assets to
    net cash provided by (used in) operating activities:
      Net realized and unrealized gains on investments               (613,531)        (395,987)         (31,258)               -       (1,040,776)
      Depreciation and amortization                                   168,097            1,588                -                -          169,685
      Unrealized gain on interest rate swap                           (17,791)               -                -                -          (17,791)
      (Increase) decrease in assets
         Accounts receivable - trade                                  (63,457)          10,742                -               -           (52,715)
         Accounts receivable - other                                   46,856            4,765                -               -            51,621
         Due from affiliates                                           (5,687)               -                -           5,687                 -
         Prepaid expenses                                             (27,184)            (588)               -               -           (27,772)
      Increase in liabilities                                                                                                                   -
         Accounts payable and accrued expenses                       219,694             4,586                -               -           224,280
         Due to chapters                                               9,125                 -                -               -             9,125
         Funds held for chapters                                           -             7,845                -               -             7,845
         Deferred revenue                                             49,111                 -                -               -            49,111
         Due to affiliates                                                 -             4,687            1,000          (5,687)                -
Net cash provided by (used in) operating activities                  411,462            (73,637)          6,337                -          344,162
Cash flows from investing activities
   Proceeds from sales of investments                               2,590,310         2,356,486         131,371                -        5,078,167
   Purchases of investments                                        (2,684,406)       (2,269,138)       (137,708)               -       (5,091,252)
   Purchases of property and equipment                               (192,043)           (4,764)              -                -         (196,807)
Net cash (used in) provided by investing activities                  (286,139)          82,584           (6,337)               -         (209,892)
Cash flows from financing activities
   Proceeds from line-of-credit                                       100,000                  -              -                -          100,000
   Payments on capital lease                                           (4,340)                 -              -                -           (4,340)
   Payments on long-term debt                                        (151,286)                 -              -                -         (151,286)
Net cash used in financing activities                                 (55,626)                 -              -                -          (55,626)
Net increase in cash and cash equivalents                             69,697             8,947                -                -           78,644
Cash and cash equivalents, beginning of year                         620,634            39,188                -                -          659,822
Cash and cash equivalents, end of year                       $       690,331     $       48,135  $           - $               - $         738,466
                                                                                     See accompanying notes to consolidating financial statements.




                                                                           9
         American Society of Interior Designers, Inc. and Affiliates
                       Notes to Consolidating Financial Statements




1. Organizations

The American Society of Interior Designers, Inc. (ASID) was established in 1975, resulting from the
merger of two interior design associations. ASID is a non-profit organization which establishes a
common identity for professionals and businesses in the field of interior design. ASID is dedicated
to satisfying the needs of its members through professional education, knowledge sharing, and
expansion of the interior design practice and markets.

ASID provides these services through its 48 chapters spanning North America. These chapters are
the focal point for the designer's involvement in ASID and its programs. Each chapter is a separate
entity having its own by-laws and its own Board of Directors. Accordingly, the financial position
and changes in net assets of the individual chapters are not included in the accompanying
consolidating financial statements.

ASID Foundation, Inc. (the Foundation) is a non-profit corporation, which establishes scholarships
and grants, awarding them to recognized schools, colleges, courses of study, or deserving persons
in the field of interior design. The Foundation is affiliated with ASID through common board
members, therefore requiring consolidation with the financial statements of ASID.

ASID Benevolent Fund (the Fund) is a non-profit organization which solicits contributions for
distribution to members in the interior design community who need assistance. The Fund is
affiliated with ASID through common board members, therefore requiring consolidation with the
financial statements of ASID.

2. Summary of Significant Accounting Policies

Consolidation Policy

The consolidating financial statements include the accounts of the American Society of Interior
Designers, Inc., ASID Foundation, Inc., and ASID Benevolent Fund and are collectively referred to as
the Society. Inter-organizational accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Society considers all highly liquid instruments, which are to be used for current operations and
which have an original maturity of three months or less, to be cash and cash equivalents. All other
highly liquid instruments, which are to be used for the long-term purposes of the Society, are
considered investments.

Accounts Receivable - Trade

This balance consists of amounts due to the Society from members, chapters, the sale of mailing
lists, and affinity programs.

Accounts receivable are stated at their net realizable value. The allowance method is used to
determine uncollectible amounts. The allowance is based upon prior years' experience and
management's analysis of subsequent collections. If actual collections experience changes, revisions
to the allowance may be required. After all attempts to collect a receivable have failed, the
receivable is written off against the allowance.


                                                10
         American Society of Interior Designers, Inc. and Affiliates
                        Notes to Consolidating Financial Statements



As of September 30, 2012, the Society believes that the allowance for uncollectible amounts is
adequate. However, future write-offs may exceed the estimated allowance recorded.

Investments

Investments are recorded at readily determinable fair market values. Fair value is defined as the
price that will be received to sell an asset or transfer a liability in an orderly transaction between
market participants at the measurement date. Unrealized and realized gains and losses are included
in the consolidating statement of activities.

Property and Equipment

Property and equipment are stated at historical cost and at fair value for contributed assets, and
are depreciated and amortized over their estimated useful lives ranging from three to forty years.
The straight-line method of depreciation and amortization is followed for all assets.

The Society capitalizes all purchases of assets over $1,000 that have a useful life greater than one
year. When assets are sold or disposed of, the cost and corresponding accumulated depreciation and
amortization are removed from the accounts with any gain or loss reflected in current operations.
Expenditures for repairs and maintenance are charged to expense as incurred.

Impairment of Long-Lived Assets

The Society reviews asset carrying amounts whenever events or circumstances indicate that such
carrying amounts may not be recoverable. When considered impaired, the carrying amount of the
asset is reduced, by a charge to the consolidating statement of activities, to its current fair value.

Due to Chapters

The Society funds the operations of its individual chapters based upon an allocation of dues received
from its membership. Due to chapters at September 30, 2012, represents funds collected on behalf
of individual chapters that have yet to be distributed.

Funds Held for Chapters

The Society acts as a custodial agent for several of its chapters. The cash received on behalf of the
chapters is commingled with the general fund cash accounts of the Society. Interest earned is
allocated based upon the principal balance. The revenue and expenses relating to the custodial
funds are not included in the accompanying consolidating financial statements.

Deferred Revenue

Deferred revenue consists of payments for memberships received in advance which are deferred to
the appropriate membership period.




                                                 11
          American Society of Interior Designers, Inc. and Affiliates
                        Notes to Consolidating Financial Statements



Interest Rate Swap

The Society follows Accounting Standards Codification (ASC) 815-10-05, Accounting for Derivative
Instruments and Hedging. The Society uses an interest rate swap to partially hedge the effects of
fluctuations in the rate of interest on its variable rate debt (see Note 11). This pronouncement
requires all such derivatives to be recorded as assets or liabilities in the statement of financial
position at their fair value. The Society does not qualify for cash flow hedge treatment under ASC
815-10-05; therefore, the adjustment to fair value is recognized through the consolidating
statement of activities.

The Society does not hold or issue derivative instruments for speculative purposes. The Society's
accounting for the interest rate swap may have the effect of increasing volatility in the
consolidating changes in net assets in any particular period.

Unrestricted Net Assets

Unrestricted net assets consist of funds available for the general operations of the Society.

Temporarily Restricted Net Assets

The Society reports gifts of cash and other assets as restricted support if they are received with
donor stipulations that limit the use of the donated assets. When a donor restriction expires, that
is, when a stipulated time restriction ends or a purpose restriction is accomplished, temporarily
restricted net assets are reclassified to unrestricted net assets and reported in the consolidating
statement of activities as net assets released from restrictions.

Gains or losses on investments and other assets or liabilities are reported as increases or decreases
in unrestricted net assets unless their use is restricted by explicit donor stipulation or by law.

Temporarily restricted net assets whose restrictions expire in the same year of receipt are classified
as unrestricted revenue in the consolidating statement of activities.

Permanently Restricted Net Assets

Permanently restricted net assets consist of assets whose use by the Society is limited by donor-
imposed restrictions that neither expire by passage of time nor can be fulfilled or otherwise
removed by actions of the Society. The restrictions stipulate that resources be maintained
permanently but permit the Society to expend the income generated in accordance with the
provisions of the agreements.

Revenue Recognition

Revenue is recognized during the period in which it is earned. Revenue received in advance and not
yet earned is deferred to the applicable period.




                                                  12
         American Society of Interior Designers, Inc. and Affiliates
                        Notes to Consolidating Financial Statements



Expenses

Expenses are recognized during the period in which they are incurred. Expenses paid in advance and
not yet incurred are deferred to the applicable period.

Functional Allocation of Expenses

The costs of providing various programs and other activities have been summarized on a functional
basis in the consolidating statement of activities. Accordingly, certain costs have been allocated
among the programs and supporting services benefited.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America require management to make estimates and assumptions that affect
certain 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 revenue and expenses during
the reporting period. Actual results could differ from those estimates.

Financial Instruments and Credit Risk

Cash and Cash Equivalents

The cash and cash equivalents of the Society are comprised of amounts in accounts at a bank and
with a custodian. While the amounts in the bank accounts at times may exceed the amount
guaranteed by federal agencies and therefore bear some risk, the Society has not experienced any
loss of funds.

Investments and Receivables

Financial instruments which potentially subject the Society to concentrations of credit risk consist
principally of investments and receivables. By policy, investments are kept within limits designed
to prevent risks caused by concentration. Credit risk with respect to receivables is generally
limited due to the fact that the Society deals with affiliates in a wide geographic area and that
the individual balances are small dollar amounts due from its members for membership, events,
products, and services.

Interest Rate Swap Agreement

The Society's long-term debt represents its mortgage payable and has a variable rate of interest.
The Society has entered into an interest rate swap agreement to convert this debt from a variable
rate to a fixed rate. Under the interest rate swap agreement, the Society agrees to pay an
amount equal to a specified fixed rate of interest times a notional principal amount and to
receive, in return, an amount equal to a specified variable rate of interest times a notional
amount. The notional amounts are not exchanged. No other cash payments are made unless the
agreement is terminated prior to maturity, in which case the amount paid or received in
settlement is established by agreement at the time of termination and usually represents the net
present value, at current rates, of the remaining obligations to exchange payments under the
terms of the contract.


                                                 13
         American Society of Interior Designers, Inc. and Affiliates
                       Notes to Consolidating Financial Statements



The Society is exposed to credit losses in the event of non-performance by the counterparty to this
interest rate swap agreement, but it does not expect the counterparty to fail to meet its obligation.
To manage credit risk, the Society selects counterparties based on credit ratings and monitors the
market position with the counterparties.

Donated Services

Individuals contribute services to assist in the furtherance of the Society's goals and objectives.
Although the value of these services is significant, the Society does not record such value in its
consolidating financial statements since the criteria for recognition in ASC 958-605-25, Not-For-
Profit Entities-Revenue Recognition, is not met.

New Accounting Pronouncement

In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update
(ASU) 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRS (ASU 2011-04). ASU 2011-04 amends ASC 820, Fair Value
Measurements and Disclosures, to provide a consistent definition of fair value and improve the
comparability of fair value measurements presented and disclosed in financial statements
prepared in accordance with U.S. GAAP and IFRS. Some of the amendments clarify the application
of existing fair value measurement and disclosure requirements, while other amendments change
a particular principle or requirement for measuring fair value or disclosing information about fair
value measurements. The amendments are to be applied prospectively and are effective for
annual periods beginning after December 15, 2011. The Society is currently evaluating the effect
the provisions of ASU 2011-04 will have on the consolidating financial statements.

3. Income Taxes
The American Society of Interior Designers, Inc., ASID Foundation, Inc., and ASID Benevolent Fund
have been granted tax-exempt status under Section 501(c)(6), 501(c)(3), and 501(c)(3) of the
Internal Revenue Code, respectively. The Society is required to report unrelated business income to
the Internal Revenue Service. The Society had an immaterial amount of unrelated business income
for the year ended September 30, 2012.

The Society follows the provisions of ASC 740-10, Accounting for Uncertainty in Income Taxes.
Income tax benefits are recognized for income tax positions taken or expected to be taken in a
tax return, only when it is determined that the income tax position will more-likely-than-not be
sustained upon examination by taxing authorities. The Society has analyzed tax positions taken for
filing with the Internal Revenue Service and all state jurisdictions where it operates. The Society
believes that income tax filing positions will be sustained upon examination and does not
anticipate any adjustments that would result in a material adverse effect on the Society’s
financial position, results of activities, or cash flows. Accordingly, the Society has not recorded
any reserves, or related accruals for interest and penalties for uncertain income tax positions at
September 30, 2012. The Society is still open to examination by taxing authorities for fiscal years
2009, 2010, and 2011.




                                                 14
         American Society of Interior Designers, Inc. and Affiliates
                        Notes to Consolidating Financial Statements




4. Uninsured Cash Balances
The Society maintains cash balances in excess of the Federal Deposit Insurance Corporation (FDIC)
limit. The non-interest bearing cash balances were fully insured at September 30, 2012, due to a
temporary federal program in effect from December 31, 2010 through December 31, 2012.

5. Investments

Investments, at fair value, consist of the following at September 30, 2012:

                                                   ASID                ASID
                                                Foundation,         Benevolent
                                 ASID              Inc.                Fund               Total
 Equity mutual funds          $ 3,311,361        $ 2,126,730        $ 168,768          $ 5,606,859
 Fixed income funds             1,198,842          1,023,223            61,369           2,283,434
 Money market funds               300,120            171,719            15,535             487,374
                              $ 4,810,323        $ 3,321,672        $ 245,672          $ 8,377,667

$7,769,325 of the investment balance is held as collateral for long-term debt as discussed in Note
11.

The following schedule summarizes the investment and interest income return for the year ended
September 30, 2012:

                                                         ASID              ASID
                                                      Foundation,       Benevolent
                                         ASID             Inc.             Fund             Total

Investment and interest earnings     $   148,224      $    76,515      $       6,337    $    231,076
Realized gains                            66,117           57,321              2,957         126,395
Unrealized gains                         547,414          338,666             28,301         914,381

                                     $   761,755      $   472,502      $      37,595    $ 1,271,852




                                                 15
          American Society of Interior Designers, Inc. and Affiliates
                         Notes to Consolidating Financial Statements




6. Fair Value Measurement

ASC 820-10-25, Fair Value Measurements, establishes a consistent framework for measuring fair
value and expands disclosure for each major asset and liability category measured at fair value on
either a recurring or nonrecurring basis. ASC 820-10-25 clarifies that fair value is an exit price,
representing the amount expected to be received to sell an asset, or paid to transfer a liability, in
an orderly transaction between market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that market participants would use
in pricing an asset or liability. To increase consistency and comparability in fair value measurements
and related disclosures, ASC 820-10-25 sets forth a three-tier hierarchy for the inputs used to
measure fair value based on the degree to which such inputs are observable in the marketplace, as
follows:

Level 1: Valuation based on quoted prices in active markets for identical assets or liabilities that a
reporting entity has the ability to access at the measurement date, and where transactions occur
with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Valuation based on inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly. Inputs include quoted prices for
similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities
in markets that are not active, that is markets in which there are few transactions, prices are not
current, or prices vary substantially over time.

Level 3: Valuation based on inputs that are unobservable for an asset or liability and shall be used to
measure fair value to the extent that observable inputs are not available, thereby allowing for
situations in which there is little, if any, market activity for the asset or liability at the
measurement date. This input therefore reflects the Society’s assumptions about what market
participants would use in pricing the asset or liability developed based on the best information
available in the circumstances.

The Society’s investments in marketable securities (money market funds, equity mutual funds, and
fixed income funds) are reported at fair value, based on quoted market prices. The fair value of the
Society’s investments in marketable securities is determined to be Level 1 as they are traded in
active markets.

The estimate of fair value of the interest rate swap liability at year end approximates its carrying
amount, which represents the amount the Society would pay to exit the swap agreement taking
into account current interest rates. Given that the swap does not have quoted market prices and
is not actively traded, its valuation is based on Level 3 inputs within the hierarchy used in
measuring fair value.

The following tables set forth by level within the fair value hierarchy the Society’s investment assets
and liabilities at fair value as of September 30, 2012. As required by ASC 820-10-25, assets and
liabilities are classified in their entirety based on the lowest level of input that is significant to the
fair value measurement.




                                                     16
          American Society of Interior Designers, Inc. and Affiliates
                        Notes to Consolidating Financial Statements



The following table presents the Society's investments and interest rate swap liability that are
measured at fair value on a recurring basis:

                               Investment Assets (Liabilities) at Fair Value
                                       as of September 30, 2012
                                                Level 1          Level 2     Level 3              Total

Investments:
 Equity Mutual Funds:
    U.S. - Blended                            $ 3,543,520      $         -    $         -       $ 3,543,520
    International Equity                          836,554                -              -           836,554
    U.S. – Large Cap Value                        914,421                -              -           914,421
    U.S. – Small Cap Growth                       312,364                -              -           312,364

 Fixed Income Funds:                              2,283,434              -              -        2,283,434

 Money Market Funds:                               487,374               -              -          487,374

 Total investments at fair value              $ 8,377,667      $         -    $         -       $ 8,377,667

Interest rate swap liability                  $           -     $        -    $(441,565)        $ (441,565)

The table below sets forth a summary of changes in fair value of the Society’s level 3 liability for the
year ended September 30, 2012:
                                                                                            Interest
                                                                                          Rate Swap
                                                                                           Liability

 Balance at September 30, 2011                                                              $     (459,356)
 Unrealized gain                                                                                    17,791
 Purchases and sales                                                                                      -

 Balance at September 30, 2012                                                              $     (441,565)

The unrealized gain is recorded in the consolidating statement of activities.

The estimated fair value of the Society’s financial instruments that are not measured at fair value
on a recurring basis as of September 30, 2012, are as follows:

                                                                             Carrying             Fair
                                                                             Amount              Value
 Long-term debt                                                          $ 1,883,781        $ 2,107,835




                                                   17
         American Society of Interior Designers, Inc. and Affiliates
                       Notes to Consolidating Financial Statements



The carrying amount is the amount at which the financial instrument is recorded on the books of the
Society. The fair value of the Society's long-term debt is estimated using the discounted cash flow
analysis using market rates for similar types of debt discounted to present value.

7. Property and Equipment

Property and equipment consists of the following at:

September 30,                                                                              2012

Furniture and equipment                                                           $      242,636
Computer equipment and software                                                        1,641,083
Less: accumulated depreciation and amortization                                       (1,067,802)

                                                                                  $     815,917

Depreciation and amortization expense for the year ended September 30, 2012, was $169,685.

8. Property Held for Sale

In January 2011, the Society initiated a plan to sell its current headquarters building. The building
and land are considered as held for sale based on the criteria in ASC 360, Property, Plant, and
Equipment. The amount reflected on the consolidating statement of financial position is the
carrying amount of the building and the land at the date management approved the sale of the
property.

9. Due to Chapters

The Society collects dues from its members and remits a percentage of those dues to local
chapters. For 2012, the percentage remitted on behalf of individual members and industry
partnership members was 27.5%. The amount of dues allocated to the chapters was $1,870,533.
In addition, the Society collects legislative contributions which are remitted in full to the
chapters. The amount of legislative contributions collected was $3,545. The Society also assessed
members $15 for Legislation in 2012. A portion of that assessment was allocated to the chapters.
The amount of legislative assessment allocated to the chapters was $38,366. The amount due to
the chapters was $259,394 at September 30, 2012.

The Society also obtains liability insurance on behalf of the chapters. The premiums for insurance
obtained were $38,366 in 2012. The cost of the chapters’ insurance is offset against the chapters’
allocation of dues. The allocation of the expense among the chapters is based on the number of
members in each chapter.




                                                 18
          American Society of Interior Designers, Inc. and Affiliates
                       Notes to Consolidating Financial Statements




10. Funds Held for Chapters

The Society held funds, as a custodian, at September 30, 2012, for the following chapters:

Chapter                                                                                   Amount
California North/Peninsula                                                            $   99,106
California North                                                                          72,049
Arizona South                                                                             36,387
Florida South – IP                                                                        36,174
Texas – Peysen                                                                            19,612
Florida South - Bud Merle                                                                 18,989
California Los Angeles                                                                    11,783
Illinois – Cuttie                                                                         10,245
Colorado                                                                                   6,882
Ohio North                                                                                 6,309
Missouri West/Kansas                                                                       4,695
California - San Diego                                                                     4,551
Georgia                                                                                    3,966
Maryland                                                                                   2,337
Washington State                                                                           1,920
Texas – McDuffie                                                                           1,175
Ohio South - Ledbetter Fund                                                                  825
Carolinas                                                                                    771
Connecticut                                                                                  576
Michigan                                                                                     187
Pennsylvania – East                                                                         (170)
Total                                                                                 $ 338,369

11. Long-Term Debt

Note Payable

In May 2006, the Society entered into a 15-year note payable agreement with SunTrust Bank for
$2,700,000 for the purchase of the building and related improvements. The Society is required to
make monthly principal and interest payments of $24,145. The interest rate on the note payable is
LIBOR plus 1.25%. The interest rate is 1.48% at September 30, 2012. The note payable is secured
by all of the Society’s investment assets held with SunTrust Institutional Classic Funds.

Interest Rate Swap Agreement

The Society has entered into an interest rate swap agreement, which converted the variable rate
liability related to the note payable into a fixed rate liability for the period July 1, 2006 through
June 1, 2021. The fixed rate obtained was 7.08%.




                                                 19
         American Society of Interior Designers, Inc. and Affiliates
                       Notes to Consolidating Financial Statements



This interest rate swap agreement qualifies as a derivative financial instrument and is used to
mitigate the effects of interest rate fluctuations. The Society accounts for the interest rate swap
as a fair value hedge, whereby the fair value of this contract is reflected in the consolidating
statement of financial position with the offset recorded as an unrealized gain or loss in the
consolidating statement of activities.

At September 30, 2012, the fair value of this contract was $($441,565). The fair value was
determined using a pricing model. This approximates the amount the Society would have to pay to
settle the interest rate swap as of September 30, 2012.

Future Scheduled Maturities

The future scheduled maturities of long-term debt are as follows:

Year Ending September 30,

2013                                                                              $     161,399
2014                                                                                    173,205
2015                                                                                    185,873
2016                                                                                    199,469
2017                                                                                    214,058
Thereafter                                                                              949,777
                                                                                      1,883,781
Less: current maturities                                                               (161,399)

                                                                                  $ 1,722,382

The loan agreement with SunTrust Bank relating to the Society's mortgage contains various
covenants pertaining to insurance coverage, debt service coverage, financial records, financial
covenants, and other requirements. The Society was in compliance with all covenants at September
30, 2012.

Line-of-Credit

During 2009, the Society obtained a $500,000 line-of-credit with SunTrust Bank. The line-of-credit
is calculated at a variable rate of 1.5% over the LIBOR Market Index Rate. The rate as of
September 30, 2012, was 2.48%. There was $100,000 outstanding on the line-of-credit at
September 30, 2012.

12. Transfer of Net Assets

During the year ended September 30, 2012, a transfer was made from designated net assets to
undesignated net assets in the amount of $6,161 based upon an approval of the Board of Directors.




                                                20
         American Society of Interior Designers, Inc. and Affiliates
                       Notes to Consolidating Financial Statements




13. Temporarily Restricted Net Assets

Temporarily restricted net assets at September 30, 2012, consist of the unspent portion of
temporarily restricted contributions and investment gain or loss received for the continuing
education program. These contributions are restricted to the following funds:

September 30,                                                                             2012
Endowment Funds:
  Joel Polsky Memorial Fund                                                        $   318,601
  Joel Polsky Memorial Fund – Addendum                                                 250,272
  Legacy Fund                                                                           94,003
  Angelo Donghia Fund                                                                   74,655
  Irene Winifred Eno Fund                                                               19,650
  David Barrett Memorial Scholarship Fund                                               14,975
Non-Endowment Funds:
  Other restricted funds                                                                16,024

                                                                                   $   788,180

14. Permanently Restricted Net Assets

Permanently restricted net assets consist of the following at:

September 30,                                                                             2012

Angelo Donghia Fund                                                                $ 1,000,000
Joel Polsky Memorial Fund – Addendum                                                   300,000
David Barrett Memorial Scholarship Fund                                                300,000
Legacy Fund                                                                            120,000
Irene Winifred Eno Fund                                                                100,000
Joel Polsky Memorial Fund                                                               75,000

                                                                                   $ 1,895,000

The earnings related to the investment of these funds are restricted for use in the continuing
education program and are included in temporarily restricted net assets.

15. Endowment

The Society’s endowment consists of individual funds established for a variety of purposes as
discussed in notes 13 and 14. As required by generally accepted accounting principles, net assets
associated with endowment funds, are classified and reported based on the existence or absence
of donor-imposed restrictions.




                                                21
          American Society of Interior Designers, Inc. and Affiliates
                        Notes to Consolidating Financial Statements



Interpretation of Relevant Law

The Society reports these funds in accordance with ASC 958-205, Endowments of Not-for-Profit
Organizations: Net Asset Classification of Funds Subject to an Enacted Version of the Uniform
Prudent Management of Institutional Funds Act (UPMIFA), and Enhanced Disclosures for All
Endowment Funds. The Society has interpreted New York Prudent and Management of Institutional
Funds Act as requiring the preservation of the fair value of the original gift as of the gift date of the
donor-restricted endowment funds absent explicit donor stipulations to the contrary. The Society
treats all donor restricted endowment funds as permanently or temporarily restricted net assets.
These endowment funds are invested in a pool with all other investments of the Society. The
returns on the endowment funds invested have been included in temporarily restricted investment
income on the consolidating statement of activities.

Endowment Net Asset Composition

The following table represents the composition of the Society’s endowment by net asset class at
September 30, 2012:

                                                            Temporarily     Permanently
                                         Unrestricted        Restricted      Restricted        Total
 Donor-restricted endowment
  Funds                                   $             -   $   772,156     $ 1,895,000    $ 2,667,156

Changes in Endowment Net Assets

The following table represents the changes in the donor restricted endowment funds at September
30, 2012:

                                                            Temporarily     Permanently
                                         Unrestricted        Restricted      Restricted        Total
 Endowment net assets, beginning
  of the year                             $             -   $   827,620     $ 1,895,000    $ 2,722,620

 Investment return                                      -       146,596               -        146,596

 Contributions                                          -              -              -                -

 Amounts appropriated for
  expenses                                              -       (202,060)             -        (202,060)

 Total                                    $             -   $   772,156     $ 1,895,000    $ 2,667,156

Return Objectives and Risk Parameters

By policy, the invested assets of the Society are invested and maintained in a balanced investment
program. The primary objective is to provide maximum growth consistent with a policy of prudent
investment and protection of assets. Growth will be attained through appreciation of assets,
inclusion of additional funds when available, and from retention of earnings of the fund.


                                                   22
         American Society of Interior Designers, Inc. and Affiliates
                       Notes to Consolidating Financial Statements



Under this policy, the invested assets achieve a long-term growth rate, which will surpass the
long-run rate of inflation for a blended benchmark, whichever is greater according to the certain
performance standards set forth by the Investment Committee. Real growth will be measured by
combining security price appreciation with earned income for a total return review and
subsequently comparing this figure to the Consumer Price Index.

Spending Policy and How the Investment Objectives Relate to Spending Policy

In order to protect the restricted endowments against losses and to insure relative stability in its
annual earnings (which are needed for interior design research, scholarships, and education), the
Investment Committee, shall declare an annual earning rate to be applied to the restricted
endowments.

The earning rate does not have to be the same as the actual performance of the endowment as a
whole. The earnings or losses on the endowments are either added to or subtracted from total
earnings of the endowment fund in temporarily restricted net assets.

16. Description of Program and Supporting Services

The following program and supporting services are included in the consolidating statement of
activities:

Meetings and events

Represents various meetings and events undertaken to further the design profession and increase
the public's appreciation of interior design.

Member development

Develops strategies and activities to recruit and retain Professional and Allied members.
Coordinates with the Education Department to further professional development of ASID members.
Also coordinates with the Student and Emerging Professionals Department on the transition of
students to Allied and Professional members.

Student and emerging professionals

Develops strategies and activities to recruit and retain Student members and designers new to the
profession. Assists members with a path to move from Students to Allied and onto Professional
membership.

Strategic marketing and communications

Includes expenses incurred to further the Society members' interior design services to the general
public through specific marketing and media relations tactics. Also includes expenses for
communicating current professional news to major media publications and Society members.




                                                23
          American Society of Interior Designers, Inc. and Affiliates
                        Notes to Consolidating Financial Statements



Research and knowledge resources

Includes the costs of creating the Society’s member magazine, e-newsletters, and print
publications. Also includes managing content on the ASID website, editorial support services, and
research services.

Legislative and public affairs

Includes expenses incurred to monitor and advocate the Society's position on a multitude of issues
affecting the practice of interior design.

Such issues might include ADA accessibility guidelines, safety laws, historic preservation, and
ergonomics.

Customer service

Responsible for assisting all members with any request or information via telephone, fax, e-mail,
or web. All member invoicing is coordinated by this department.

Education

The Society offers a wide range of continuing education opportunities and knowledge of new
techniques, products, important issues, and business management. These programs include
workshops, lectures, and expenses related to the production and sale of educational materials.

Industry development

Expenses incurred in uniting both professional designers and manufacturers of design-related
products and services through improved business practices, stronger communication networks,
relationship-building techniques, research and marketing programs, and various educational
opportunities.

Chapter services

Supports and provides leadership, training, and information to all 48 professional chapters of ASID.
This department coordinates all ASID nominations and elections.

Support

Includes funding for the ASID Foundation scholarships, awards, and support of education programs.
The Benevolent Fund support activity is comprised of assistance to ASID members who are
currently suffering from major medical issues and are in need of financial assistance.

ASID Advantage

Manages and promotes ASID affinity programs such as the job center, credit cards, mailing list
rentals, and the world wide referral service.




                                                24
         American Society of Interior Designers, Inc. and Affiliates
                       Notes to Consolidating Financial Statements



Governance

Expenses cover costs relating to the governance structure of the Society.

Finance and administration

Includes the functions necessary to maintain an adequate working environment and manage
financial and budgetary responsibilities of the Society.

Executive office

Includes the cost for operations of the Executive Director and Deputy Executive Director, as well
as staff training and development.

Information technology

Includes the costs for operations of the ASID computer systems, software, and membership
database.

Fundraising

Includes costs associated with the production of events, mailings, and general solicitations of
funds for the Foundation.

Foundation

Consists of funds transferred from ASID to the Foundation to cover salaries of employees working for
the Foundation.

17. Retirement Plan

The Society maintains a 401(k) Profit Sharing Plan and Trust that covers substantially all full-time
employees once they have reached age 21 and have completed six months of service. Under the
terms of the plan, the Society matches:

   a) 100% of the participating employees' contribution up to 4% of the employee's salary; and
   b) 50% of the participating employees' contribution for the next 2% of the employee's salary.

Contribution expense to the plan for the years ended September 30, 2012, was $84,206.




                                                25
         American Society of Interior Designers, Inc. and Affiliates
                       Notes to Consolidating Financial Statements




18. Commitments and Contingencies

Office Equipment and Services

The Society is obligated under an operating lease for certain office equipment and services that
expires in 2014 and requires future minimum payments as follows:

Years Ending September 30,
2013                                                                                $     464,894
2014                                                                                      442,024

                                                                                    $     906,918

Payments made under the lease agreement for the year ended September 30, 2012, amounted to
$417,903.

Employment Contract

The Society has executed an employment contract with a key employee, which will expire in
February, 2014. In the event of a reduction in workforce, the Society guarantees the lesser of (i) 8
months of compensation or (ii) compensation for the remaining number of months left in the
agreement from date of cancellation.

19. Related Party Transactions

ASID performs various administrative tasks for the Foundation and the Fund. ASID also provides
office space and pays certain expenses on behalf of these related entities and charges the
respective entities for their share. The time and related salary for three ASID staff members is
allocated to the Foundation and paid for from the Foundation budget.

20. Supplemental Disclosure of Cash Flows Information

The Society paid $140,734 in interest expense for the year ended September 30, 2012.

21. Subsequent Events

The Society has evaluated subsequent events through February 19, 2013, which is the date the
consolidating financial statements were available to be issued. No subsequent events were noted
that required adjustment to the consolidating financial statements.




                                                26

				
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