SAE Annual Report 2009 - 34

a decrease in change in net assets of approximately $210,000. Beginning net assets have been decreased accordingly in the amount of approximately $374,000 as of January 1, 2008 for the effect of retrospective application of the new methods.

Note 1 - Summary of Significant Accounting Policies (Continued)depending on the form of the received as assets, decreases of liabilities, or expenses benefits received. Conditional promises to give are recognized when the conditions on G. Pledges Receivable which they depend are substantially met.

Unconditional promises to give the amount as revenues or gains collect from Pledges receivable are stated atare recognizedmanagement expects to in the period received as assets, decreases of has established an allowance for on the form of the outstanding balances. Managementliabilities, or expenses depending uncollectible pledges benefits its evaluation of the individual pledge. promises to give are The preparation of financial INTERNATIONAL based on received. Conditional SAE INTERNATIONALrecognized when the conditions on SAE statements in conformity with generally accepted which they depend are substantially met. accounting principles requires management to make estimates and assumptions. These SAE INTERNATIONAL to the Financial Statements (Continued) estimates and assumptions affect the reported amounts of assets and liabilities, and the H. Investments Notes to the Financial Statements (Continued) Notes Pledges receivable are stated at the amount management expects to collect from disclosure of contingent assets and liabilities at the date of the financial statements, and the outstanding balances.presented at fair value as measured by quoted uncollectible Those Notes to the Financial StatementsManagement has established an allowance formarket prices.pledges (Continued) reported revenues and expenses during the reporting period. Actual results could differ from Investments are based on its received of the individual pledge. recorded those estimates. investments evaluationas gifts or donations are(Continued)at their fair value on the date Note 1 - Summary of Significant Accounting Policies (Continued) Note 1 - Summary of Significant Accounting Policies received. Investment activity includes unrealized and realized gains and losses on H. Investments Note 1 - Summary of Significant Accounting Policiesappreciation), interest and dividends. E. Cash and Cash Equivalents investments (net (Continued) C. Change in Accounting Principle (Continued) G. Pledges Receivable

SAE International

Estimates

Notes to the Financial Statements

Investments Committee at fair value as measured byof SAE has documented an quoted Those Pledges Receivable For purposes that the new methods of revenue recognition more accurately reflect The Finance are presented of the are recognized as revenues ormarket prices. period SAE believes of the statement of cash flows, SAE considers allG.highly liquid Unconditional promises to give Board of Directors gains in the investments received as the or donations are recorded at in three value on the The investments with an initial maturity thethree months or less to be cash equivalents.The 2009 Investment Policy. Under giftspolicy, the investments are held their fairseparate pools. date periodic results of operations and of economic substance of the transactions. received as assets, decreases of liabilities, or expenses depending on the form of the received. Investment includes unrealized Unconditional promises to give are recognized activity promises gains in are and with the when the conditions on period liquidity investment Conditional in short-term give the recognized primary goal of safety on is revenues or to investments realized gains and losses of effect of these changes was to increase accounts receivable by approximately $321,000, benefits received. pool as held investments liquidity and is depending on to form SAE’s cash revenue were allocated to numerous banking institutions operating assets, decreases of liabilities, or expenses primarily utilized themeet the operating cash needs of SAE. The principal and (net appreciation), interest and dividends. of the increase deferred balances by approximately $870,000, and decrease the received in net change as in which they depend are substantially met. promises to give pool is held for longer term objectives western by approximately $244,000.time, the balance may be in for 2008 the Federal of have been assets Pennsylvania. From time to The financial statements excess benefits received. Conditionalgeneral investment are recognized when the conditions onof SAE and, accordingly, the Board of Directors period. has an which they depend are substantiallyThe Finance Committee of the returnamount ten-year of SAE The fundscollect from met. Deposit Insurance Corporationthese changes, which resulted in an increase in accounts (FDIC) insurance limit. investments are managed to stated at the over a management expects documentedpool retrospectively restated for Pledges receivable are optimize to in this Investment Policy. Under the such the investments are for in three separate pools. The are held for balances.purposespolicy, has financial support held new for uncollectible pledges receivable of approximately $447,000, an increase in deferred revenue of $1,031,000, and outstanding general Management as established an allowance projects, additions and liquidity the of property is held in short-term investments with Pledges receivable are stated at investment pool and equipment,pledge. collect expected orprimary goal of safety of F. decrease in change in net assets of approximately $210,000. Beginning net assets have Accounts Receivable replacement evaluation management expects any other from the unexpected events that a based on its amount of the individual and to principal and liquidity an The Foundation to meet pledges require financial support. allowance utilizedinvestment operating cash provide resources been decreased accordingly in the amount of approximately $374,000 as outstanding balances. Management has establishedand is primarily for uncollectible thepool is held to needs of SAE. The of January 1, general investment pool is programs, and term objectives provide and, accordingly, based on from Accounts receivable are stated at the amount new methods. needed to help support SAE held for longer its objective is to of SAE modest growth of the 2008 for the effect of retrospective application of the management expects to collect its evaluation of the individual pledge. H. Investments investments are managed to optimize return vehicles used to achieve the investment pool balances outstanding at year end. Management provides for probable uncollectible amounts fund after spending and inflation. Investmentover a ten-year period. The funds in thisgoals are time are: for new projects, additions and through a charge to earnings and a credit to a valuation allowance based on H. assessment its Investments overheld for general purposes such as financial support by quoted market prices. Those SAE INTERNATIONAL D. Estimates Investments are presented at fair value as measured replacement of property and equipment, and any other expected or unexpected events that of the current status of individual accounts. Any balance that is still outstanding after investments received as gifts or donations are recorded at their fair value on the date require Liquidity support. The Foundation investment Those is held to pool resources fair Investment cash and cash equivalents (100%). management has used of to the Financial Statementsconformity with generally Investments are presented at • financial Pool - activity quoted market prices.and realized gainsprovide losses on written off Notes financial statements in The preparation reasonable collection efforts is(Continued) through a charge to the accepted received. value as measured by includes unrealized and or donations support SAE atSAE INTERNATIONAL date valuation allowance and a credit to trade accounts receivable. assumptions. These allowance received as giftsneeded to help are recorded programs, -andvalue and the is to provide modest growth of the • General and Foundation their fair dividends.fixed income. The strategic allocation pools and its objective equities on accounting principles requires management to make estimates and The investments for investments (net appreciation), interest includes 70% equities and realized gains and losses on achieve the investment goals uncollectible accounts was approximately $223,000 at December 31, 2009 received. Investment activityfund after spending andand 30% fixed income. and $275,000 is unrealized inflation. Investment vehicles used to estimates and assumptions affect the reported amounts of assets and liabilities, and the time investments (net interest are: at December 31, 2008. assets and liabilities at the date of the financial statements, and the appreciation),over The and dividends. Note 1 - Summary of Significant Accounting Policies (Continued) disclosure of contingent Notes to the the Board of Directors of SAE has documented an Finance Committee ofFinancial Statements (Continued) SAE’s investments the policy, to various risks, such in interest rate, pools. and reported revenues and expenses during the reporting period. Actual results could differ from Investment Policy. Underare exposed the investments are held as three separate market The The Finance Committee credit risks. Dueof pool is heldof cash equivalents (100%).withinvestments and thesafety of of • investment Directors the Board to - cash and short-term documented an SAE has investments G. Pledges Receivable those estimates. liquidity Liquidity Poolthe level in risk associated with these the primary goal of level of Investment Policy. Under the 1 - Summary ofand Foundationin theutilized of these fixed income. cash needs ofreasonably policy, the related toand is Accounting equities and investments, The strategic allocation • and liquidity changes pools - separate pools. The Note uncertainty investments are held in threePolicies meet the operating it is at least SAE. The Page 12 principal General Significant primarily value to (Continued) possible investment pooland held for longer goal objectives that changes in is near term could materially affect SAE and, reported in the Unconditional Equivalents in the period E. Cash and Cash promises to give are recognized as revenues or gainsliquidity investment pool is held in short-term investments with the primary term of safety of ofthe amountsaccordingly, the general is 70% equities the 30% fixed income. principal and liquidity and is primarily utilized tomanaged to optimize return over aSAE. Theperiod. The funds in this pool financial statements. received as assets, decreases of liabilities, or expenses depending on the form of the H. Investments meet the operating cash needs of ten-year investments are (Continued) term purposes such SAE’s various support for benefits received. Conditional promisesof cash flows, SAE considers the general investment pool is held for longer generalobjectives of SAE to financial risks, such as interest rate, market and to give are recognized when all conditions on For purposes of the statement highly liquid are held forinvestments are exposed asand, accordingly, the new projects, additions and investments are managed to optimize return overreturnslevel its risk associated other fund in operating activities.level of ten-year of liquidity funds with these credit risks. of property and equipment, and any in this pool investments and the These which they with an initial maturity met. investmentsdepend are substantiallyof three months or less to be cash equivalents. SAE records replacement Due toathe on period. The investment expected or unexpected events that are held for general purposesreturns as financial to changes in the projects, these of pool is held part provide reasonably such financial support. for new value of additions and uncertainty included supportaccompanying statements investments,as is atof other resources require are related in the The Foundation investment activities it to least products replacement in possibleto help any other expected term and is reflected that provide modest nonoperating could Pledges receivable are stated at the amount management institutions operating of SAE’s cash balances were allocated to numerous banking expects to collect from property and equipment, and All other SAE programs, Page itsmaterially isas a the amountsof growth of the and services. changes in investment activity 13objective affect component reported in the needed that support the near or unexpected events to financial statements. outstanding balances. From time to time, the balance may be for uncollectible Federal western Pennsylvania. Management has established an allowance in excess require pledges support. The Foundation investment pool is Investment vehicles used to achieve the investment goals of the financial activities. spending and inflation. held to provide resources fund after needed to help support SAE programs, and its objective is to provide modest growth of the based on its evaluation of the (FDIC) insurance Deposit Insurance Corporation individual pledge. limit. over time are: fund after spending and inflation. Investment vehicles used to achieve the investment goals I. Inventories over time are: H. Investments F. Accounts Receivable • Liquidity Pool - cash and cash equivalents (100%). Inventories and supplies are stated- at the lower of costincome. The on the first-in, first• General and Foundation pools Page 13 and fixed (determined strategic allocation equities • Liquidity Pool - cash and cash equivalents method) or market. Investments are presented at fair the as measured by quoted market prices. from Accounts receivable are stated atvalue amount management expects to collectThose out or average cost (100%). 30% fixed income. is 70% equities and General investments received as gifts or Management recorded at their fair value on• amounts balances outstanding at year end. donations areprovides for probable uncollectible the date and Foundation pools - equities and fixed income. The strategic allocation is on received. Investment activity includes unrealized and realized gains and losses 70% through a charge to earnings and a credit to a valuation allowance based on its assessment equities and 30% fixed income. Equipment exposed to various risks, such as interest rate, market and J. Property and SAE’s investments are investments (net appreciation), interest and dividends. of the current status of individual accounts. Any balance that is still outstanding after credit risks. Due to the level of risk associated with these investments and the level of SAE’s investments are exposed to variousequipment acquired value rate, market and management has used reasonable collection efforts is written off through a charge to the Property and risks, such as interest of these investments, it is is provided by the uncertainty related to changes in the is recorded at cost. Depreciation at least reasonably of risk that changes in The allowance and a of the Directors of SAE The credit risks. an valuation Finance Committee credit toBoard ofaccounts receivable. has documented for trade allowance Due to the level straight-line method with the estimated usefuland the theaffect the amounts reported in the possible associated over these investments lives of level of near term could materially assets. Investment accounts was approximately $223,000 are held in 31, separate pools. related to changes in the value of these investments, it is at least reasonably uncollectiblePolicy. Under the policy, the investmentsat Decemberthree 2009 uncertainty The and $275,000 financial statements. possible that changes in the near term could materially affect the are not considered in the liquidity investment pool at December 31, 2008. is held in short-term investments with the primary goal of safety of Maintenance and repairs which amounts reported to extend the useful lives of assets financial statements. principal and liquidity and is primarily utilized to meet the operating cash needs of SAE. The are charged to operations as incurred. Expenditures exceeding $1,000 for additions and general investment pool is held for longer term objectives of SAE and, accordingly, the improvements are capitalized. Upon sale or retirement, the cost of assets and related investments are managed to optimize return over a ten-year period. The funds in this pool allowances are removed from the accounts and any resulting gains or losses are included in Page 12 Page 13 are held for general purposes such as financial support for new projects, additions and income (expense) for the year. replacement of property and equipment, and any other expected or unexpected events that Page 13 require financial support. The Foundation investment pool is held to provide resources K. Goodwill needed to help support SAE programs, and its objective is to provide modest growth of the fund after spending and inflation. Investment vehicles used to achieve the investment goals Goodwill is not amortized but is tested for impairment on at least an annual basis. over time are: Impairment testing is required more frequently if impairment indicators arise. In conducting its impairment testing, SAE compares the fair value of each reporting unit to the related net • Annual Report 34 2009 Liquidity Pool - cash and cash equivalents (100%). book value. If the fair value of a reporting unit exceeds its net book value, goodwill is not • General and Foundation pools - equities and fixed income. The strategic allocation considered to be impaired. If the book value of a reporting unit exceeds its fair value, an is 70% equities and 30% fixed income. impairment loss is measured and recognized. SAE conducts its annual impairment testing in

SAE Annual Report 2009

Table of Contents for the Digital Edition of SAE Annual Report 2009