Independent Auditors’ Report and Financial Statements
Years Ended March 31, 2015 and 2014
Notes to Combined Financial Statements
Note 1 – n. Dues income (continued)
ment by individual members. As part of contract agreements
with the Society, companies withhold monthly membership
dues from the paychecks of the Society’s members. The Society
bills all “Beck Objector” dues directly to those employees on a
monthly basis. No part of dues income was paid directly to support any political parties or candidates.
o. Advertising Costs:
Advertising costs are expensed as incurred.
p. Concentrations of Risk:
Financial instruments that potentially subject an entity to a concentration of credit risk consist of cash in bank and brokerage
deposit accounts. The Society and SPEEA Properties maintain
cash balances at several financial institutions. Beginning January 1, 2013, all of a depositor’s accounts at an insured depository institution, including all noninterest-bearing transaction accounts, are insured by the Federal Deposit Insurance Corporation
(FDIC) up to the standard maximum deposit insurance amount
($250,000), for each deposit insurance ownership category. As of
March 31, 2015 and 2014, the total uninsured cash balance was
approximately $3,072,000 and $2,763,000, respectively. The Society and SPEEA Properties have not experienced any losses with
these accounts during the years ended March 31, 2015 and 2014,
and management believes it is not exposed to any significant
credit risk on its cash balances.
All of the Society’s members are covered by collective bargaining
agreements. Since dues and fees revenue from these members
represents a significant portion of the Society’s gross receipts, it
is at least reasonably possible that a strike resulting from expired
contracts would disrupt the normal function of the Society.
q. 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 certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
r. Income Tax Status:
The Society is exempt from federal income taxes under section 501(c)( 5) and SPEEA Properties is exempt from federal
income taxes under section 501(c)( 2) of the Internal Revenue
Code and, therefore, have made no provision for federal income
taxes in the accompanying combined financial statements. In
addition, there was no unrelated business income for the years
ended March 31, 2015 or 2014.
The Society accounts for tax positions in accordance with FASB
Accounting Standards Codification Topic 740, Income Taxes.
With few exceptions, the Society is subject to federal and state
income tax examinations by tax authorities for the prior three
years. Management has reviewed the Society’s tax positions
and determined there were no uncertain tax positions as of
March 31, 2015 and 2014.
s. Subsequent Events:
In preparing these combined financial statements, management of the Society has evaluated events and transactions for
potential recognition or disclosure through July 16, 2015, the
date the financial statements were available to be issued.
Note 2 – Investments and
Fair Value Measurements
The Fair Value Measurements and Disclosures Topic of the FASB
Accounting Standards Codification establishes a framework for
measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used
to measure fair value. The hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets
or liabilities (level 1 measurements) and the lowest priority to
unobservable inputs (level 3 measurements). The three levels
of the fair value hierarchy under this Topic are described below:
1) Level 1: Inputs to the valuation methodology are
unadjusted quoted prices for identical assets or liabilities in active markets that the organization has
the ability to access.
2) Level 2: Inputs to the valuation methodology include:
a. Quoted prices for similar assets or liabilities in
b. Quoted prices for identical or similar assets or
liabilities in inactive markets,
c. Inputs other than quoted prices that are observable for the asset or liability,
d. Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
If the asset or liability has a specified (contractual)
term, the Level 2 input must be observable for
substantially the full term of the asset or liability.
3) Level 3: Inputs to the valuation methodology are
unobservable and significant to the fair value measurement.
The asset’s or liability’s fair value measurement level
within the fair value hierarchy is based on the lowest
level of any input that is significant to the fair value
measurement. Valuation techniques used need to
maximize the use of observable inputs and minimize
the use of unobservable inputs.
The following is a description of the valuation methodologies used for assets measured at fair value. There
have been no changes in the methodologies used as of
March 31, 2015:
•;Common stocks: Valued at the closing price
reported on the active market on which the individual securities are traded.
•;Mutual funds: Valued at the net asset value of
shares held by the organization at year end.
•;Government bonds: Valued at the closing price
reported on the active market on which the individual securities are traded.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Society and
SPEEA Properties believe its valuation methods are appropriate
and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value
of certain financial instruments could result in a different fair
value measurement at the reporting date.
All investments are classified under level 1 measurements
within the fair value hierarchy.
The investments of the Society and SPEEA Properties consisted
of the following as of March 31, 2015 and 2014, with their respective cost and fair values:
See Chart below
Note 3 – SPEEA Staff Pension Plans
The Society contributes to a money purchase pension plan and a
401(k) plan that provides benefits for substantially all full-time
SPEEA staff. Both plans are defined contribution plans so that
there are no past service costs, and vested benefits cannot exceed
the assets of the plan. The provision for the money purchase pension plan is computed at 7.5% of the employees' eligible compensation. Contributions to the money purchase pension plan for
the years ended March 31, 2015 and 2014 were $308,399 and
$301,850, respectively. The provision for the 401(k) plan is computed by matching a portion of the employees’ eligible contributions to the plan. Contributions to the 401(k) plan for the years
ended March 31, 2015 and 2014 were $213,777 and $209,741,
respectively. The liability for future pension costs for both plans is
based solely on future compensation of the SPEEA staff.
In addition, the Society contributes to a multiemployer defined
benefit pension plan, the Western Conference of Teamsters
Pension Plan, on behalf of staff members represented by IBT
Local Union No. 763. An equivalent basis is contributed into
the money purchase pension plan on behalf of personally contracted staff which totaled $28,844 and $25,900 for the years
which ended March 31, 2015 and 2014, respectively.
Cost Fair Value Gain (Loss) Cost Fair Value Gain (Loss)
Commonstocks $21,525 $98,646 $77,121 $21,525 $84,985 $63,460
Mutualfunds 6,127,245 6,655,153 527,908 3,171,735 3,770,954 599,219
Governmentbonds - - - 96,082 96,259 177
$6,148,770 $6,753,799 $605,029 $3,289,342 $3,952,198 $662,856