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Cultural Council of Indian River County, Inc. Notes to Financial Statements Note 1 — Summary of Significant Accounting Policies Organization The Cultural Council of Indian River County, Inc . , (the Council) is a Florida nonprofit organization created on February 6, 1995. The Council's mission is to nurture _a cooperative environment in which cultural and educational organizations and individuals may thrive and, thereby, enrich the quality of life in Indian River County, Florida. Method of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting. Net Assets Grant income and contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any grantor and donor restrictions. Support that is restricted by the grantor and donor is reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. All other donor-restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. The Council has no permanently restricted net assets . Property and Equipment Property and equipment acquisitions greater than $ 500 are capitalized and stated at cost. Donated property and equipment is recorded at the fair market value at the date of the gift. Depreciation is provided on a straight-line basis over the estimated useful life of the assets, which is five years . Income Tax Status The Council is exempt from federal income tax under Section 501 (c)(3 ) of the Internal Revenue Code. In addition the Council has been determined not to be a private foundation within the meaning of Section 509(a) of the Code . Functional Allocation of Expenses The cost of providing the various programs and other activities has been summarized on a functional basis in the statement of functional expenses . Accordingly, certain costs have been allocated among the programs and supporting services benefited. Donated Services In accordance with SFAS 116 , the Council does not record donated services for any volunteers working in a nonprofessional capacity. -6-