COMPUTER PROFESSIONALS FOR SOCIAL RESPONSIBILITY, INC.

(A NON-PROFIT ORGANIZATION)

PALO ALTO, CALIFORNIA

NOTES TO COMPILED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CPSR alloctes expenses on a functional basis among its various programs and administration. Expenses that can be identified with a specific program and administration are allocated directly according to their natural expenditure classification.

• Property and equipment

All assets are recorded at cost or, if donated, at fair market value. Depreciation is calculated on a straight line basis over their estimated useful lives:

• Financial Statement Presentation:

Contributions

CPSR adopted Statement of Financial Accounting Standards No. 116, Accounting for Contributions Received and Contributions Made. In accordance with SFAS No. 116, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence or nature of any donor restrictions. As permitted by SFAS No. 116, CPSR has retroactively applied the provisions of this new statement by restating net assets as of June 30, 1996.

Assets

The Organization also adopted SFAS No. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS No. 117, CPSR is required to report information regarding its financial position and activities according to three classes of net assets. In addition, CPSR is required to present a statement of cash flows. As permitted by this Statement, CPSR has discontinued the use of fund accounting and has, accordingly, reclassified its financial statements to present three classes of net  

Unrestricted Net Assets

Unrestricted funds represent resources over which the Board of Directors has discretionary control and are used to carry out the operations of CPSR in accordance with its bylaws.

Temporarily Restricted Net Assets

Temporarily restricted assets represent resources currently available for use, but expendable only for operating purposes specified by the donor. Resources of this fund generally originate from gifts, grants, bequests, and contracts.

Permanently Restricted Assets Assets in this category are permanently restricted as to their use and cannot be used for any other purpose.

o Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires the use of management's estimates.

The $ 5,914 in this account represents the amount due to chapters by the national office at June 30, 1998. The potential amount that can be repaid, if requested by the Chapter, is a maximum of 15 percent of member dues applicable to the Chapter.