AOAC BOD June 2018 Pre-Meeting Materials

The Scientific Association Dedicated to Analytical Science ®


Finance committee Item 2.2a


June 6, 2018


Directors, AOAC INTERNATIONAL Board of Directors

FROM: Joyce L Schumacher SUBJECT: Accrual Basis Financial Statements – as of 31 March 2018 __________________________________________________________________ The statement of financial position at March 31, 2018 and the statement of revenue and expenses for the first quarter of 2018 follow this summary. In the three months, the Association experienced an accrual basis net loss of ($250,716) on income of $1,063,425 and expenses of $1,314,141. This compares unfavorably with the same period last year when the Association had an accrual basis net gain for the quarter of $183,875. Income has decreased by ($415,583) over the same period in 2017. The net decrease is due mostly to revenue from appreciation of investments, contracts and book sales. Appreciation of investments is down ($219,110) over the 2017 amount. The market change in investments affects the accrual basis financial statements but is irrelevant to operating revenues and expenses. Net loss from operations (after removing $9,190 depreciation of investment revenue) at March 31, 2018 was ($241,526). Net loss from operations at March 31, 2017 was ($26,045). Expenses have increased by $19,009 over the same period in 2017. Net income information on these financial statements differs from the cash flow report due to the accounting requirement to recognize revenue and expenses in the month they are incurred regardless of when payment is received or made. Also, non-cash items such as asset depreciation and market adjustments of investment holdings are reflected on the accrual basis financial statements. The cash flow report for March showed net cash from operations of ($41,412) compared to the loss of ($250,716) reported above. Along with market changes on investments and deprecation, accounts receivable and accounts payable are not considered on a cash flow report. Accounts receivable at March 31 were $383,435. This means that the revenues were earned but the payment has not yet been received. Accounts payable and accrued expenses at March 31, 2017 were $648,624. These are expenses that the Association has incurred but payment has not yet been made. Deferred revenue as of March 31 is $1,449,524. This is money that AOAC has received for future activities. Most of this revenue is for activities in 2018. Rent liability was $777,985. This is accounting for future rent payments. Money due to RI is $1,809,563. The accounting staff is making every effort to pay accounts payable within 30 days.

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