Note 1 – Summary of Significant Accounting Policies
current salary level. The actual amounts paid to satisfy this
liability will depend upon the employee’s salary level at the
time of the payment.
n. Dues Income:
Dues income represents funds received from members either
through a payroll deduction by The Boeing Company, Triumph
Composite Systems, Inc., Spirit AeroSystems, or a direct payment
by individualmembers. As partofcontract agreements withthe
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. 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, 2016 and 2015, the total
uninsured cash balance was approximately $4,005,000 and
$3,072,000, respectively. The Society and SPEEA Properties have
not experienced any losses with these accounts during the years
ended March 31, 2016 and 2015, 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
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, 2016 and 2015.
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, 2016 and 2015.
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 25, 2016, 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
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
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, 2016:
•;Common stocks: Valued at the closing price reported
on the active market on which the individual securities
•;Mutual funds: Valued at the net asset value of shares
held by the organization at year end.
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, 2016 and 2015, 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, 2016 and 2015
were $361,758 and $308,399, 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, 2016 and
2015 were $260,782 and $213,777, 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
Independent Auditors’ Report and Financial Statements
Years Ended March 31, 2016 and 2015
Notes to Combined Financial Statements
Cost Fair Value Gain (Loss) Cost Fair Value Gain (Loss)
Commonstocks 21,525 81,614 60,089 21,525 98,646 77,121 $
Mutualfunds 6,576,530 6,826,146 249,616 6,127,245 6,655,153 527,908
6,598,055 6,907,760 309,705 6,148,770 6,753,799 605,029