SAE Annual Report 2009 - 35

out or average cost method) or market. J. Property and Equipment

Property and equipment acquired is recorded at cost. Depreciation is provided by the straight-line method over the estimated useful lives of the assets. Maintenance and repairs which are not considered to extend the useful lives of assets are charged to operations to the Financial Statements (Continued)$1,000 for additions and Notes as incurred. Expenditures exceeding improvements are capitalized. Upon sale or retirement, the cost of assets and related allowances are removed from the accounts and any resulting gains or losses are included in income (expense) for the year. Note 1 - Summary of Significant Accounting Policies (Continued) K. H. Goodwill Investments (Continued)

Support that is restricted by the donor is reported as an increase in temporarily or permanently restricted net assets, depending on the nature of the restriction. When a 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 restrictions.

SAE International

SAE INTERNATIONAL

In-kind Donations

Notes to the Financial Statements (Continued) Donated materials and services meeting the requirements of generally accepted accounting principles are reflected as contributions at their estimated values at date of receipt. Note 1 - Summary of Significant Accounting Policies (Continued) N. H. Fair Value Measurements Investments (Continued)

Notes to the Financial Statements

SAE INTERNATIONAL

Goodwill is not amortizedits liquidity investment fund in operating an annual These SAE records returns on but is tested for impairment on at least activities. basis. Impairment includedisin the accompanying statements of activities as part of other products required more frequently if impairment indicators arise. In conducting returns are testing its impairment All other investment activity is reflected as reporting unit to the related net and services. testing, SAE compares the fair value of each a component of nonoperating book value. If the fair value of a reporting unit exceeds its net book value, goodwill is not activities. considered to be impaired. If the book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. SAE conducts its annual impairment testing in I. Inventories December each year. At December 31, 2009, SAE determined that the recorded value for goodwill was not impaired. are stated at the lower of cost (determined on the first-in, firstInventories and supplies out or average cost method) or SAE INTERNATIONAL market. L. Revenue Recognition J. Notes to Property and Equipment the Financial Statements (Continued) Revenue is recognized when earned.

SAE applies fair value on its liquidity all financial assets andoperating and non-financial SAE records returns accounting for investment fund in liabilities activities. These assets and liabilities that are recognized or statements of activitiesin the financial statements SAE INTERNATIONAL returns are included in the accompanying disclosed at fair value as part of other products on a services. basis. SAE defines fair value as the price that a component of nonoperating and recurring All other investment activity is reflected as would be received from selling an asset or paid to transfer athe Financial Statements (Continued) Notes to liability in an orderly transaction between market participants activities. at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, SAE considers the principal or I. Inventories most advantageous market in which SAE would transact and the market-based risk Note 1 - Summary of Significant Accounting Policies (Continued) measurements or assumptions that market participants would use in pricing the asset or Inventories and supplies are stated at the lower of cost (determined on the first-in, firstliability, such asMeasurements transfer restrictions and credit risk. N. or average cost method) or(Continued) out Fair Value inherent risk, market. J. SAE applies the following fair value hierarchy, which prioritizes the inputs used to Property and Equipment measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of equipment is available and 15 Property and input that acquired Page significant to the fair value measurement: the is recorded at cost. Depreciation is provided by straight-line method over the estimated useful lives of the assets. Level 1 - Quoted prices in active markets for identical assets or liabilities. Maintenance and repairs which are not considered to extend the useful lives of assets Level 2 Observable as incurred. Expenditures exceeding $1,000 for for identical are charged -to operationsinputs other than quoted prices in active marketsadditions and assets and liabilities, quoted prices for or retirement, the cost or assets and related improvements are capitalized. Upon sale identical or similar assets of liabilities in inactive markets, removed from that are observable resulting gains or losses by included in allowances areor other inputs the accounts and any or can be corroborated are observable market data for the year. income (expense)for substantially the full term of the assets or liabilities. K. Level 3 - Inputs that are generally unobservable and typically reflect management’s Goodwill estimates of assumptions that market participants would use in pricing the asset or liability. is not amortized but is tested for impairment on at least an annual basis. Goodwill

Property and equipment acquired is recorded at cost. Depreciation is provided by the Revenues received the estimated Policies to which they relate, such as membership Note 1 - Summary of Significant Accountingthe year (Continued) straight-line method overin advance of useful lives of the assets. dues and meeting and conference attendance fees, are deferred and recognized over the periods to which the income relates. are not considered to extend the useful lives of assets L. Revenue Recognition (Continued) Maintenance and repairs which

are charged to operations as incurred. Expenditures exceeding $1,000 for additions and Magazines and publications revenue includes print advertising revenue; book, CD-ROM, improvements are capitalized. Upon sale or retirement, the cost of assets and related and print sales; royalty from the accounts and any resulting gains or losses are included in subscription revenue. Print advertising revenue is allowances are removed revenue; and Page 14 recognized when the the year. income (expense) for advertisement is run. Book, CD-ROM and print sales are recognized when the products ship to the customer. Royalty revenues received under contract from a third Goodwill sells SAE’s standards and related documents are recognized at the point of K. party that sale. Subscription revenue is recognized ratably over the term of the subscription. Goodwill is not amortized but is tested for impairment on at least an annual basis. Contractual revenue, included frequently standards on the statement In conducting Impairment testing is required morein technical if impairment indicators arise.of activities, is recognized when earned under the terms fair the contracts. reporting unit to the related net its impairment testing, SAE compares the of value of each Advance receipts from grants and contracts are reflected asof a reporting unituntil earned. net book value, goodwill is not book value. If the fair value deferred revenue exceeds its considered to be impaired. If the book value of a reporting unit exceeds its fair value, an Contributions received are recorded as conducts its temporarily restricted, in impairment loss is measured and recognized. SAE unrestricted, annual impairment testing or permanently restrictedAtsupport, depending on the existence that nature of any donor December each year. December 31, 2009, SAE determined or the recorded value for restrictions. not impaired. goodwill was L. Support that is restricted by the donor is reported as an increase in temporarily or Revenue Recognition permanently restricted net assets, depending on the nature of the restriction. When a restriction expires (that is, when earned. a stipulated time restriction ends or purpose restriction is Revenue is recognized accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in received in advance of theas net to which they relate,restrictions. Revenues the statement of activities year assets released from such as membership dues and meeting and conference attendance fees, are deferred and recognized over the M. In-kind Donations periods to which the income relates. Donated materials and services meeting the requirements of generally accepted accounting principles are reflected as Page 14 contributions at their estimated values at date of receipt. N. Fair Value Measurements

Impairment testing is required more frequently if impairment indicators arise. In conducting O. impairment testing, SAE compares the fair value of each reporting unit to the related net its Income Taxes book value. If the fair value of a reporting unit exceeds its net book value, goodwill is not SAE consideredistoexempt from Federal income tax a reporting unit 501(c)(3) its fair value, an be impaired. If the book value of under Section exceeds of the Internal Revenue Code (IRC). impairment loss is measured and recognized. SAE conducts its annual impairment testing in December each year. At December 31, 2009, SAE determined that the recorded value for SAE adopted the accounting standard for uncertain tax positions as of January 1, goodwill was not impaired. 2009. The standard requires a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with the asset and liability method. The first step L. Revenue Recognition is to evaluate the tax position for recognition by determining whether evidence indicates that Revenue is likely than when earned. it is more recognized not that a position will be sustained if examined by a taxing authority. The second step is to measure the tax benefit as the largest amount that is 50% likelyRevenues received in advance of the with to taxing they relate,The adoption of this of being realized upon settlement year a which authority. such as membership standard did not have a material impact on SAE’s financial deferred and recognized over the dues and meeting and conference attendance fees, are statements. periods to which the income relates. P. Recently Issued Accounting Standards

SAE applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. SAE defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, SAE considers the principal or

On September 15, 2009, the Financial Accounting Standards Board (FASB) Accounting Page 14 Standards Codification (Codification) became the single source of authoritative generally accepted accounting principles in the United States of America. The Codification changed the referencing of financial standards but did not change or alter existing generally accepted accounting principles in the United States of America. The Codification became effective for SAE at that date.

2009 Annual Report
Page 16

SAE Annual Report 2009

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