THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED YEARS ENDED DECEMBER 31, 2018 and 2017
expires, net assets with donor restrictions are reclassified to net assets without donor restrictions, including if the restriction expires in the fiscal year in which the contributions are recognized.
Revenue from certain grants is recognized by the NHPF and Pathways in full, upon written notification of the award. Grants are recognized as support without donor restrictions only to the extent of actual expenses incurred in compliance with grantor-imposed restrictions. Grants received in excess of expenses incurred are shown as assets with donor restrictions in the accompanying consolidated statement of activities. Unconditional promises to give that are expected to be received within one year are recorded at net realizable value. Unconditional promises to give that are expected to be received in future years are recorded at the present value of their estimated future cash flows using discount rates approximating the rate of return on U.S. government securities with similar maturities.
In-kind Contributions/Expense Donated property and equipment are recorded at fair market value at the date of the donation.
NHPF and Pathways utilizes the services of outside volunteers. However, the fair value of these services is not recognized in the accompanying consolidated financial statements, since they do not meet the criteria of being a specialized service that would typically need to be purchased and do not enhance or create an asset. Developer Fee Revenue Development fees are recorded as income in the period earned according to the developer fee agreement. If the developer fee agreement is silent as to when the developer fee is earned, NHPF recognized income in the period earned based on the percentage of completion method, taking into account the total anticipated development costs of the related project including completion and operating deficit guarantee obligations. The unearned portion is classified as deferred revenue. Development fees are carried at their net realizable value. Only the portion of development fees to be paid from operating cash flow is eliminated in consolidation. Construction in Progress Costs associated with the acquisition, development and construction of housing projects are carried at cost. Construction in progress is capitalized and is included in land, buildings, improvements and equipment on the consolidated statements of financial position. Functional Expense Allocation The costs of providing various programs and other activities have been summarized on a functional basis in the consolidated statements of activities and detailed in the consolidated statements of functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Program services are allocated between four categories: rental operations, acquisition and development, asset management and resident services. Costs allocated to rental operations relate to personnel and other costs involved in operating the properties. Costs allocated to acquisition and development relate to personnel and other costs associated with locating
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