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Substance Abuse Council of Indian River County, Inc. Notes to Financial Statements Note 1 — Summary of Significant Accounting Policies Organization The Substance Abuse Council of Indian River County, Inc. (the Council) is a nonprofit organization incorporated on April 17, 1990, under the laws of Florida. The Council's mission is education and referral to aid in the prevention of alcohol and drug abuse. Method of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting. Net Assets Contributions received are recorded as . unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and/or nature of any donor restrictions . Support that is restricted by the 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 . Property and Equipment Property and equipment acquisitions greater than $500 are 6capitalized and are 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 asset, which range from 5 -7 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 . Contributed Services The Council receives various amounts of donated services from unpaid volunteers . However, these amounts have not been recognized in the accompanying financial statements because the criteria for recognition of such volunteer efforts under SFAS No . 116 have not been satisfied. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures . Accordingly, actual results could differ from those esti nates . -6-