Annual Rept 2015.publisher. full report

Frenchman’s Creek, Inc. and Subsidiary

Notes to Consolidated Financial Statements

Note 1.

Nature of Organization and Significant Accounting Policies (Continued)

Cash and Cash Equivalents: For purposes of reporting cash flows, the Association considers repurchase agreements secured by U.S. Treasury obligations, demand deposits, and short-term investments with original maturities of three months or less to be cash equiva- lents. Cash and cash equivalents are held at various financial institutions and may, at times, exceed federally-insured limits. The Asso- ciation has not experienced any losses in these accounts.

Certificates of Deposit: Certificates of deposit earn interest at rates varying from .95% to 1.98% and mature at various dates from Au- gust 2014 through May 2016.

Board Designated Funds: Designated funds consist of cash and cash equivalents, certificates of deposits and assessments receivable for specific projects or purposes. These funds are designated for specific capital expenditures and payments to resigned members. The funds are provided by initiation fees, member assessments, proceeds from the sale of property and equipment and other capital sources of funds including lines of credit and long-term debt. Member Receivables: Member receivables are carried at original billing amounts. Management evaluates member receivables on a monthly basis. An allowance for doubtful receivables is recorded to the extent that outstanding receivable balances exceed a member’s certificate redemption value. A member receivable is considered past due thirty (30) days after the due date. Interest is charged on member receivables that are out- standing for more than thirty (30) days at a rate of one and one-half percent (1 ½%) per month. After forty-five (45) days, the Associa- tion will issue a certified letter giving a forty-five (45) day notice of the intent to lien the property of the member in the event that full pay- ment is not received. Any cost or fees incurred for collection will be the responsibility of the delinquent member. After sixty (60) days, the Association levies a service charge of $100 per day, to a maximum of $1,000, until payment is received in full. The member will be suspended by the Board of Governors from all privileges and access to the recreational facilities. All dues, fees and assessments for the current fiscal year will be accelerated and will be required to be paid in full prior to reinstatement. Foreclosure proceedings will com- mence forty-five (45) days from the date of lien.

Pursuant to its Bylaws, the Association has the right to institute collection or legal actions against any member in arrears with all costs, including attorney’s fees, for collection or legal action being the responsibility of said members.

Inventories: Inventories are valued at the lower of cost (last-in, first-out method) or market. Inventories consist of food and beverage items and pro shop merchandise.

Property and Equipment: Property and equipment are recorded at cost. Depreciation is being computed by the straight-line method based on the following estimated useful lives of the depreciable assets.

2014/2015 Annual Report Page 36