THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED YEARS ENDED DECEMBER 31, 2019 and 2018
Distributable cash flows from certain affiliated entities to NHPF and Interstate are restricted by covenants in the underlying mortgages or grants received by the affiliated entities. Contributions paid by the affiliated entities and received by NHPF and Interstate are eliminated in consolidation. NHPF and its nonprofit affiliated entities conform to the accounting guidance for “Financial Statements of Not-for-Profit Organizations.” These financial statements have been prepared on the accrual basis of accounting and are intended to present net assets, revenue, expenses, gains and losses based on the existence or absence of donor-imposed restrictions. Accordingly, net assets and changes therein are classified as follows:
Net assets without donor restrictions -
o Net assets without donor restrictions - controlling - represent expendable resources that are used to carry out the operations of the Organization and are not subject to donor-imposed stipulations. o Net assets without donor restrictions - non-controlling - represent the aggregate balance as of December 31, 2019 and 2018 of limited partner/member equity interest in the non-wholly-owned affordable housing entities that are included in the consolidated financial statements. The majority of non-controlling net assets without donor restrictions consists of the limited partner interests in tax credit holdings. Net assets with donor restrictions - resources which contain donor-imposed restrictions that are satisfied either by the passage of time or by actions of the Organization. Other donor restrictions are perpetual in nature, where the donor has stipulated the funds be maintained in perpetuity. Revenue is reported as increases in net assets without donor restrictions unless uses of the related assets are limited by donor-imposed restrictions. Expenses are reported as decreases in net assets without donor restrictions. Expirations of temporary restrictions on net assets are reported as reclassifications between the applicable classes of net assets. Cash and Cash Equivalents For purposes of the statement of consolidated cash flows, the Organization considers all investments with original maturities of three months or less to be cash equivalents. Restricted Cash Restricted cash consists of cash required to be segregated as specified in certain grant and loan documents. Prepaid Expenses and Other Assets Prepaid expenses and other assets consist primarily of prepaid costs, tenant account receivables and subsidy receivables.
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