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CABARRUS COUNTY TOURISMA UTHORITY d/b /a CABARR US COUNTY CONVENTIONAND VISITORS B UREA U NOTES TO THE FINANCIAL STATEMENT June 30, 2011 and 2010 NOTE 1 - NATURE OF ACTIVITIES Nature of the Organization Cabarrus County Tourism Authority d/b /a Cabarrus County Convention and Visitors Bureau (the Organization) is a non -profit organization, incorporated under the laws of the State of North Carolina, created to promote tourism in Cabarrus County, North Carolina. The Organization was created on June 6, 2008. In prior years, the Organization was part of Cabarrus County, North Carolina and was reported as a special revenue fund in the financial statements of Cabarrus County, North Carolina. The Organization is supported by the room occupancy tax in Cabarrus County, North Carolina. Cabarrus County, North Carolina collects and remits the room occupancy tax collected, less an administration fee, to the Organization. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. Cash and Cash Equivalents For purposes of the statements of cash flows, the Organization considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. Accounts Receivable Accounts receivable are stated at the amount management expects to collect on outstanding balances. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based on its assessment of the current status of individual receivables. There was no allowance for doubtful accounts at June 30, 2011 and 2010. All accounts receivable are expected to be collected. Bad debt expense for the years ended June 30, 2011 and 2010 was $2,000 and $2,420, respectively. Donated Properly Donated property and other noncash donations are recorded as contributions at their estimated fair market value as established by the donor at the date of donation. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates. Advertising Advertising costs are expensed as incurred. Total advertising expense for the year ended June 30, 2011 and 2010 was $279,402 and $388,561, respectively. - Continued- 9 Attachment number 2 1 -5 Page 374