Executive Vice President - 2008/09

156 MODEL AVIATION
HERE ARE the Notes to Financial Statements. They tell you in words what the Financial
Statements present in figures. There are many of them and all may be seen on the AMA Web
site in the Members Only area.
More next month.
The real test of a person is to possess power without abusing it. There is no better test of
someone’s character than their behavior when they are wrong.
A-B-C Always Be Courteous. Until later ...
Doug Holland
3517 Fernwood Dr.
Raleigh NC 27612
Home: (919) 787-5163
Work: (919) 781-7550
Executive Vice President
Doug Holland; [email protected]
THE ACADEMY OF MODEL AERONAUTICS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Academy of Model Aeronautics, Inc. (the “Academy”) was incorporated in 1966 under the laws of the District of
Columbia. The Academy’s primary objective is to promote the educational and scientific aspects of model aviation.
Accounting Methods - The Academy maintains its accounts on the accrual basis of accounting and accordingly reflects all
significant receivables, payables and other liabilities.
Basis of Accounting - The Academy’s financial statement presentation follows the recommendations of the Financial
Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-
For-Profit Organizations. Under SFAS No. 117, the Academy reports 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.
Financial Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of
income and expenses during the reporting period. Actual results could differ from those estimates.
Membership Revenue - Memberships are sold on a calendar year basis and revenue is recognized when earned except for life
memberships, which are recognized when sold.
Concentration of Credit Risk - Financial instruments that potentially subject the Academy to credit risk consist principally of
advertising receivables. In addition, the Academy had funds on deposit with a financial institution in excess of the $100,000
federally insured limit at December 31, 2007 and 2006. The Academy maintains its primary banking and financing relationships
with one financial institution.
Revenue Recognition - All contributions are considered available for the Academy’s general programs unless specifically
restricted by the donor. Amounts received that are designated for future periods or restricted by the donor are reported as
temporarily or permanently restricted support and increase the respective class of net assets. Contributions received with
temporary restrictions that are met in the same reporting period are reported as unrestricted support and increase unrestricted
net assets.
Property and Equipment- Land, buildings and improvements, and equipment are carried at cost. Expenditures for
improvements and replacements are added to the property and equipment accounts. Repairs and maintenance are charged to
expense as incurred.
Depreciation is provided over the estimated useful lives of the assets using the straight-line method.
Cash Equivalents - The Academy considers all liquid investments with original maturities of three months or less to be cash
equivalents.
Income Taxes - The Academy operates as a nonprofit organization and has received exempt status under Section 501(c)(3) of
the Internal Revenue Code. The Academy is, however, subject to unrelated business income tax on magazine advertising,
merchandise sales, internet advertising and rental income from debt financed property. There was no unrelated business
income tax expense for the years ended December 31, 2007 and 2006.
At December 31, 2007 and 2006, the Academy had net operating loss carryforwards for federal tax purposes of approximately
$824,000 and $842,000, respectively, available to offset future unrelated business income. In addition, the Academy had net
operating loss carryforwards for state tax purposes of $841,000 and $822,000 as of December 31, 2007 and 2006, respectively.
These carryforwards will begin to expire in 2019 if not previously utilized.