SAE Annual Report 2011 - 38

SAE INTERNATIONAL
Notes to the Financial Statements (Continued) Note 1 - Summary of Significant Accounting Policies (Continued) C. Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. D. Cash and Cash Equivalents

For purposes of the statement of cash flows, SAE considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. SAE’s cash balances are allocated to numerous banking institutions operating in western Pennsylvania. From time to time, the balance may be in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limit. E. Accounts Receivable

Accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Any balance that is still outstanding after management has used reasonable collection efforts is written off through a charge to the valuation allowance and a credit to trade accounts receivable. The allowance for uncollectible accounts was approximately $236,000 at December 31, 2011 and $166,000 at December 31, 2010. F. Pledges Receivable

Unconditional promises to give are recognized as revenues or gains in the period received as assets, decreases of liabilities, or expenses depending on the form of the benefits received. Conditional promises to give are recognized when the conditions on which they depend are substantially met. Pledges receivable are stated at the amount management expects to collect from outstanding balances. Management has established an allowance for uncollectible pledges based on its evaluation of the individual pledge.

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SAE Annual Report 2011

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