Kids for the Kingdom 2018 Independent Financial Audit

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KIDS FOR THE KINGDOM, INC. NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2018 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) M. New Accounting Pronouncement During the year ended December 31, 2018, the Organization adopted the requirements of the Financial Accounting Standards Board’s (FASB) Accounting Standards Update No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities (ASU 2016-14). The Update addresses the complexity and understandability of net asset classification, deficiencies in information about liquidity and availability of resources, and the lack of consistency in the type of information provided about expenses and investment return between not-for-profit entities. A key change required by ASU 2016-14 is the net asset classes used in these financial statements. Amounts previously reported as unrestricted net assets are now reported as net assets without donor restrictions and amounts previously reported as temporarily restricted net assets and permanently restricted net assets are now reported as net assets with donor restrictions. A footnote on liquidity has also been added (see Note 6). N. Restatement During the year ended December 31, 2018, management determined that accounts payable was understated for the year ended December 31, 2017. As a result, a restatement of the prior period expenses was recorded, resulting in a decrease of net assets without donor restrictions of $7,257. O. Subsequent Events Kids for the Kingdom, Inc. evaluated subsequent events for recognition and disclosure through September 24, 2019, the date which these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since December 31, 2018 that requires recognition or disclosure in such financial statements. NOTE 3 – BEQUEST RECEIVABLE During the year ended December 31, 2018, the Organization became entitled to a distribution from the Rouse Family Living Trust. As of the date of reissuance of these financial statements, the Organization has received $15,000,000, which has been recorded as a receivable as of December 31, 2018. Management has estimated that the total amount it will receive is approximately $53 million based on the fair value of the assets held in the trust as of December 31, 2018. Management expects to receive distributions from the trust in 2019 and 2020. The amounts received from the trust will be placed in an endowment fund to be held in perpetuity. In addition to the corpus of the bequest, interest, dividends and capital gains accumulated as of December 31, 2018, amounted to $2,564,239, and was recorded as interest receivable as of yearend. The Organization will be allowed to utilize the investment earnings from the endowment to advance its ministry worldwide. 12
NOTE 4 – IN-KIND DONATIONS KIDS FOR THE KINGDOM, INC. NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2018 The Organization is not charged for the use of its office space. Fair value of the office space was $14,400 for the year ended December 31, 2018 and is recognized in the accompanying financial statements as in-kind donations, offset by expenses for occupancy. The Organization also received a one-time donation of clothing. Fair value of the clothing was $820 for the year ended December 31, 2018 and is recognized in the accompanying financial statements as in-kind donations, offset by in-kind expense. NOTE 5 – NET ASSETS WITH DONOR RESTRICTIONS As of December 31, 2018, the Organization had $17,564,239 of net assets with donor restrictions. This amount consisted solely of the Allison and Dorothy Rouse Endowment discussed in Note 3. $15 million is classified as Net Assets with Donor Restrictions – in Perpetuity, as the corpus of the bequest is to be held in a permanent endowment. The remaining $2,564,239 relating to the investment earnings as of year-end are classified as Net Assets with Donor Restrictions, until such time as it is received and spent on programs. NOTE 6 – LIQUIDITY AND AVAILABILITY OF RESOURCES Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the balance sheet date, consisted of cash and cash equivalents of $21,434 and interest receivable of $2,564,239, totaling $2,585,673, as of December 31, 2018. 13
Page 1 and 2: KIDS FOR THE KINGDOM, INC. FINANCIA
Page 3 and 4: INTRODUCTORY SECTION
Page 5 and 6: KIDS FOR THE KINGDOM, INC. Financia
Page 7 and 8: FINANCIAL SECTION
Page 9 and 10: INDEPENDENT AUDITOR'S REPORT To the
Page 11 and 12: KIDS FOR THE KINGDOM, INC. STATEMEN
Page 13 and 14: KIDS FOR THE KINGDOM, INC. STATEMEN
Page 15 and 16: NOTE 1 - REPORTING ENTITY A. Descri
Page 17 and 18: KIDS FOR THE KINGDOM, INC. NOTES TO
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Kids for the Kingdom 2018 Independent Financial Audit

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