[Date Prev][Date Next][Thread Prev][Thread Next] - [Date Index][Thread Index][Author Index]

RE: Third try!



Hi Luc,

First, I will address your questions.  Last summer, I was involved in
helping Rick and Gunther understand the accounting rules.  As a member
of AMSAT, I am also a CPA (retired).  About two years ago, I brought it
to the attention of the officers, via e-mail, that the financial
statements were missing various reporting requirements.  When Gunther
became treasurer, he addressed these concerns.  The adoption of SFAS 117
and 125 are nothing more then an accounting method for those areas
addressed. These adoptions were an "accounting" adoption.  The FASB,
Financial Accounting Standards Board is the regulator for proper
accounting rules in the U.S.  In 1995, they changed these regulations,
for everyone, on those issues.  The auditor would have not been able to
issue audited statement without their adoptions.  That is an accounting
requirement, not an AMSAT choice.

As far as estimates, that language is a CPA's catch all.  For instance,
in a billion dollar corporation, the numbers on the statement may not be
exact. For instance, in a coal company, how does one determine the
amount of coal or oil in inventory underground without estimating?

Addressing the in-kind and satellite capitalization and depreciation.  I
did considerable research that probably saved AMSAT thousands of dollars
in accounting fees on those issues.  Then Gunther and Rick presented it
to the auditors that agreed on my research.

The capitalization is because one of the purposes of AMSAT is to build
satellites.  These satellites, no ECHO jokes, do have a useful life. So,
it was incorrect from GAAP , Generally Accepted Accounting Principals to
expense them....regardless of profit or non-profit status.  The
depreciable life is based upon industry standards, which again, I
presented to Gunther and the auditors agreed that was the appropriate
useful life. These should have been adopted years ago.

The in-kind should have been adopted years ago.  If I donate $10,000 and
AMSAt pays a consultant $10,000 to design a satellite, my net is $0.
Because AMSAT has such a talented pool of individuals, the in kind
services are donated just as the cash would have been donated an
expensed.  As noted above, the CPA's may have charged $5,000 for my
accounting research had they done it and presented the same statement.
So in-kind truly accounts for all resources available to AMSAT.

Are they making money?  My advise is don't get fooled by profit and
loss.  Compare cash and investments.  Because, if AMSAT saves $300,000
because of in-kind, and doesn't have to spend a dime from operations and
can save it for future work, that's a great thing.  So my advice is to
compare liquidity from year to year.  Again, that is why the satellite
is capitalized.  It would be incorrect to see an AMSAT statement
$500,000 lower in cash because they spent it on a satellite and
basically reflect nothing for it.....which isn't true....there is a
$500,000 bird circling the earth. 

This is not new age accounting.  This is proper and correct accounting.
In my professional opinion, the prior years did not reflect actuality.
They were missing pertinent info to the average reader. I'm not trying
to ruffle feathers, but, I don't have the skill of building satellites.
However, most of the AMSAT members do not have my skill in accounting.
This just happens to be the year of the "correction".  Through no fault
of anyone prior.

73
Greg
N3MVF

-----Original Message-----
From: owner-AMSAT-BB@amsat.org [mailto:owner-AMSAT-BB@amsat.org] On
Behalf Of Luc Leblanc VE2DWE
Sent: Wednesday, March 09, 2005 3:59 PM
To: amsat-bb@amsat.org
Subject: [amsat-bb] Third try!

HI to all sorry if you get this post twice the two first one seems to 

not made it...

On my spare time i recently read over the 2003 AMSAT financial 
statement. I try to figure out if AMSAT financial results as of 
december 31 2003 resulted in a gain or a deficit?

I understand in this 2003 financial reports there is some reference 
to "Estimates" as 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 estimates.

I also noted that SFAS 117 and 125 dated back as they where "elected 
to adopt" in 1995 has been resurrected. From my point of view this 
only contribute to messed up financial reports understanding.

If i read the revenue/expenses section i get an "unrestricted" gain 
of 292127$ or a loss of 125265$ if i excluded the "contributions" eg: 

in kind contributions?

>From the stand-point philosophical it's fine but  it's not what i 
called crystal clear clarity.

My first question is: did AMSAT is making or loosing money in 2003?
And how come some contributed services costs on satellite constructed 
after 2002  should be depreciated over a 4 years span? AMSAT is a non 
profit organization? (no income tax to be paid) why should we 
calculate any depreciation here?

At least this seems to indicate that AMSAT is forecasting on a 4 
years life span on the satellites build after 2002? Or this new way 
of presenting the financial statements is geared to attract 
donations?

I'm not too sure i will feel right when asking for donations based on 


this paper! when a total "assets/revenue over expenses" mix seems to 
top 1 million (918299$).

We are all aware that near nobody will donate to a loosing money 
business If it's the intent fine but should we called this innovated 
accounting or new age accounting?

I'm probably out in the field but i'm sure someone will correct me? 
Failing to do so will be much more puzzling for me!





"-"
Luc Leblanc VE2DWE
Coordonnateur AMSAT Quebec coordonnator
AMSAT 33583
www.qsl.net/ve2dwe 
----
Sent via amsat-bb@amsat.org. Opinions expressed are those of the author.
Not an AMSAT member? Join now to support the amateur satellite program!
To unsubscribe, send "unsubscribe amsat-bb" to Majordomo@amsat.org
----
Sent via amsat-bb@amsat.org. Opinions expressed are those of the author.
Not an AMSAT member? Join now to support the amateur satellite program!
To unsubscribe, send "unsubscribe amsat-bb" to Majordomo@amsat.org



AMSAT Top AMSAT Home