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1 STUDEBAKER NATIONAL MUSEUM, INC. ' Notes to Financial Statements December 31,2016 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED ' Contributions and Grants The Museum reports gifts and grants of cash and other assets as restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor ' 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 and changes in net assets as net assets released from ' restrictions. Unconditional promises to give that are expected to be collected within one year are recorded at ' net realizable value. Unconditional promises to give that are expected to be collected in future years are recorded at the present value of their estimated future cash flows. Amortization of the discounts is included in contributions revenue. Conditional promises to give are not recognized ' as revenue until the conditions are substantially met. Contributions of services are required to be recognized if the services received required specialized skills, and are provided by individuals possessing those skills, and would typically ' need to be purchased if not provided, or services that create or enhance a non financial asset. However, a substantial number of unpaid volunteers make significant contributions of their time to the Museum. The value of this time is not reflected in the accompanying financial ' statements, because the services are not susceptible to objective measurement or valuation. As of December 31, 2016 and 2015, no amounts for contributed services were recognized in the accompanying financial statements. ' Compensated Absences The employees of the Museum are entitled to paid absences depending on length of service and other factors. It is impractical to estimate the amount of compensation for future absences, and accordingly, no liability has been recorded in the accompanying statement of financial position. The Museum's policy is to recognize costs of compensated absences when actually paid. ' Beneficial Interests in Assets The Museum recognizes its beneficial rights in assets held by others (by community foundations)unless the donor has granted the recipient organization variance power. However, ' if the Museum is both the donor and the beneficiary of the assets, those rights are recognized even if the recipient organization has been granted variance power. Beneficial interests in assets held by others are stated at fair value, based on the value of the ' underlying assets, as provided by the Community Foundation that hold the assets. The fair value approximates the present value of expected future distributions. Changes in the value of beneficial interests are included in investment income in the statement of activity and changes ' in net assets. Membership Revenue ' Membership revenues are collected and accounted for by the Northern Indiana Historical Society and submitted on a monthly basis to the Museum. Therefore, no deferred membership ' revenue is recognized on the Statement of Financial Position. ' (See auditors'report.) 8