SAE Annual Report 2012 - 39

SAE INTERNATIONAL AND SUBSIDIARIES
Notes to the Consolidated Financial Statements (Continued)
Note 1 - Summary of Significant Accounting Policies (Continued)
G. Pledges Receivable (Continued)
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.
H. Investments
Investments are presented at fair value as measured by quoted market prices. Those
investments received as gifts or donations are recorded at their
The Finance Committee of
the Board of Directors of SAE has documented an
Investment Policy. Under the policy, the investments are held in three separate pools. The
liquidity investment pool is held in short-term investments with the primary goal of safety of
principal and liquidity and is primarily utilized to meet the operating cash needs of SAE. The
general investment pool is held for longer term objectives of SAE and, accordingly, the
investments are managed to optimize return over a ten-year period. The funds in this pool
are held for general purposes such as financial support for new projects, additions and
replacement of property and equipment, and any other expected or unexpected events that
require financial support. The Foundation investment pool is held to provide resources
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
over time are:
 Liquidity pool - cash and cash equivalents (100%).
 General and Foundation pools - equities and fixed income.
The strategic allocation
is 60% equities, 30% fixed income and 10% alternative investments.
SAE's investments are exposed to various risks, such as interest
rate, market and
credit risks. Due to the level of risk associated with these investments and the level of
uncertainty related to changes in the value of these investments, it is at least reasonably
possible that changes in the near term could materially affect the amounts reported in the
financial statements.
SAE records returns on its liquidity investment fund in operating activities. These
returns are included in the accompanying statements of activities as part of other products
and services. All other investment activity is reflected as a component of nonoperating
activities.
Page 13
39
fair value on the date
received. Investment activity includes unrealized and realized gains and losses on
investments (net appreciation/depreciation), interest and dividends.

SAE Annual Report 2012

Table of Contents for the Digital Edition of SAE Annual Report 2012