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Child Care Resource Center, Inc. Notes to Financial Statements
Note 2 – Summary of Significant Accounting Policies (continued)
In-kind contributions – Donated office space, donated equipment, and other donated goods and services are recorded at their estimated fair value as of the date of the donation if the fair value exceeds $1,000. CCRC received professional services relating to the Head Start Program valued at $141,125 and $86,978 for the years ended June 30, 2018 and 2017, respectively.
Functional expenses – The costs of providing the various programs and other activities have been summarized on a functional basis. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Fundraising costs of $120,908 and $201,639 for the years ended June 30, 2018 and 2017, respectively, were not charged to any child development contracts.
Income taxes – CCRC has been designated as tax-exempt under Internal Revenue Code Section 501(c)(3) and is also exempt from state franchise taxes under Section 23701(d) of the California Revenue and Taxation Code and is not generally subject to federal or state income taxes. CCRC files an exempt organization return in the U.S. federal jurisdiction and the state of California.
However, CCRC is subject to income taxes on any net income that is derived from a trade or business, regularly carried on, and not in furtherance of the purposes for which it was granted exemption. No income tax provision has been recorded as the net income, if any, from any unrelated trade or business and, in the opinion of management, is not material to the financial statements. CCRC has determined no uncertain tax benefits or liabilities exist at June 30, 2018 and 2017.
Use of 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 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.
Environmental regulation – Substantially all of CCRC’s facilities are subject to federal, state, and local provisions regulating the discharge of materials into the environment. Compliance with these provisions has not had, nor does CCRC expect such compliance to have any material effect upon the capital expenditures, change in net assets, or financial condition of CCRC. Management believes that its current practices and procedures for the control and disposition of such waste comply with applicable federal and state requirements.
Recently adopted accounting pronouncements – In January 2016, FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10). This ASU is intended to improve the recognition and measurement of financial instruments. This ASU eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the statements of financial position. CCRC has adopted ASU 2016-01 as of and for the year ended June 30, 2018, and applied it to all years presented.
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