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CABARRUS COUNTY TOURISMA UTHORITY d/b /a CABARRUS COUNTY CONVENTIONAND VISITORS BUREAU NOTES TO FINANCIAL STATEMENTS June 30, 2011 and 2010 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued Contributions Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support, depending on the existence and /or nature of any donor restrictions. Support that is restricted by the donor is reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. All other donor - restricted support is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When the 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 as net assets released from restriction. Income Tax Status Cabarrus County Tourism Authority is recognized as an organization exempt from federal income tax and not subject to private foundation status under Section 501(c)(6) of the Internal Revenue Code. The Organization has adopted ASC 740 -10, effective for audit years ending after December 15, 2009, as it relates to uncertain tax positions for the years ended June 30, 2011 and 2010 and has evaluated its tax positions for all open tax years. Currently, the 2008, 2009 and 2010 tax years are open and subject to examination by the Internal Revenue Service. However, the Organization is not currently under audit nor has the Organization been contacted by the Internal Revenue Service. Based on the evaluation of the Organization's tax positions, management believes all positions taken would be upheld under an examination. Therefore, no provision for the effects of uncertain tax positions have been recorded for the years ended June 30, 2011 and 2010. Net Assets The net assets of the Organization herein are classified and reported as: Unrestricted net assets - Net assets that are not subject to donor- imposed stipulations. Temporarily restricted net assets — Net assets subject to donor imposed stipulations that may, or will, be met either by actions of the Organization and /or the passage of time. Permanently restricted net assets — Net assets subject to donor - imposed stipulations that they be maintained permanently by or for the benefit of Cabarrus County Tourism Authority. The Organization had no permanently restricted net assets at year end. Functional Expenses Expenses are charged directly to program or management and general categories based on specific identification. - Continued- ml W Attachment number 2 Page 375