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STUDEBAKER NATIONAL MUSEUM, INC. ' Notes to Financial Statements December 31,2016 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED Advertising Costs The Museum expenses all advertising costs when incurred. For the year ended December 31, ' adverting expense was $26,153 - 2016 and$20,958 -2015. Contributed Materials and Services ' A number of unpaid volunteers have made significant contributions of their time to develop the Museum's programs principally in collection development and educational programs. The value of this contributed time is not reflected in the accompanying financial statements since it ' is not susceptible to objective measurement or valuation, and does not meet the requirements for recognition under ASC 958. The Museum records various types of in-kind contributions, including honorarium fees, storage space and facility rental, marketing and advertising expense and special event food and entertainment expense. Contributions of tangible assets are recognized at fair market value ' when received. The amounts reflected in the accompanying financial statements as in-kind contributions are offset by like amounts included in expenses. ' Reclassifications Certain items in the prior year amounts have been reclassified to conform to the current year presentation. The reclassifications did not affect the change in net assets or fund balances. NOTE 2 -PROPERTY AND EQUIPMENT ' Property and equipment consist of the following at December 31: ' 2016 2015 Land $ 7,000 $ 7,000 Building 1,575,422 1,552,622 ' Leasehold improvements 148,688 148,688 Equipment 1,099,445 1,132,070 Total cost 2,830,555 2,840,380 Less accumulated depreciation !1,484,825) 1,479,062) Property and equipment, net $ 1,345,730 $1,361,318 ' NOTE 3-CONCENTRATIONS The Museum's members, donors and activities are concentrated in the St. Joseph County, ' Indiana area. Accordingly, its membership, gifts, and other sources of support and revenue, and collection of contributions receivable, may be affected by economic conditions in the area. In addition, for the year ended December 31, management fees collected from the City of South ' Bend comprised approximately 21.25%-2016 and 17.30%-2015 of total revenue. ' (See auditors'report.) 10