SAE Annual Report 2010 - 43

SAE INTERNATIONAL
Notes to the Financial Statements (Continued) Note 1 - Summary of Significant Accounting Policies (Continued) A. Nature of Organization (Continued) SAE is affiliated with SAE Industries Technology Consortia (formerly SAE Institute), a Pennsylvania not-for-profit corporation organized by SAE in December 2003. It operates as a trade association organized to oversee and manage its programs and participant groups. Its mission is to provide an efficient and legal framework for automotive, aerospace, or commercial vehicle companies and organizations to create solutions to technical and business problems. The Internal Revenue Service has granted SAE Industries Technology Consortia tax-exempt status under Section 501(c)(6) of the IRC. An SAE Section is a local unit comprised of SAE members in a defined technical or geographic area. The purpose of local sections is to meet the technical needs of the SAE members in that given area. There are over 78 established sections and groups. The funds and accounts of SAE Sections are not included in the accompanying financial statements. B. Basis of Accounting

The accompanying financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. Net asset classifications and changes in each of those classes are reported in the financial statements, and detailed information regarding the purpose of temporarily and permanently restricted net assets are disclosed in Note 8. The accompanying financial statements include only the assets, liabilities, net assets and financial activities of SAE. The funds and accounts of SAE Sections are not included in the accompanying financial statements. However, Sections are permitted to invest in a money market investment pool and a long-term investment pool managed by SAE. Funds of Sections participating in the pool are included in investments and are reflected as an accounts payable liability in the accompanying financial statements. C. Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenues and expenses during the reporting period. Actual results could differ from those estimates.

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SAE Annual Report 2010

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