THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2017 and 2016 __________
Debt issuance costs, net of accumulated amortization, are reported as a direct deduction from the face amount of the mortgage notes payable to which such costs relate. Amortization of debt issuance costs is reported as a component of interest expense and is computed using an imputed interest rate on the related loan. Deferred Costs Deferred costs consist of tax credit fees and other intangible assets. The deferred costs are amortized over the estimated useful life using the straight-line method. Deferred Development Costs Costs incurred in the identification of potential developments are deferred. Deferred development costs are reimbursed upon the receipt of project financing for the related entity. Costs incurred on unlikely or abandoned developments are expensed when these determinations are made. Developer fees receivable NHPF has entered into various development agreements with the affiliated tax credit and real estate entities of which, NHPF and their related general partner/member entities serve as the general partner or managing member in these entities. The agreements provide for the fee to be paid from capital contributions and future cash flows of the respective entities. Developer fees receivable presented on the combining and consolidating statement of financial position represent developer fees due from related entities for development services. Developer fees receivable, developer fee income and deferred developer fee earned from affiliates and subsidiaries shall be paid by the related entities upon receipt of the limited partner equity contribution. Any remaining developer fee receivable, and accrued interest there in, if applicable, is payable from operational cash flow of the respective projects and is eliminated in consolidation. Developer fees receivable are reported at their net realizable value. Management’s estimate of any allowance is based on collectability determined by future operating cash flows of the related entities. It is reasonably possible that management’s estimate of allowances will change. The balance of developer fees receivable, net of allowance for uncollectable, after eliminating adjustments, as of December 31, 2017 and 2016 is $7,280,512 and $263,445, respectively and is included in due from affiliates in the consolidated statements of financial position. Land, Buildings, Improvements and Equipment Land, buildings, improvements and equipment are recorded at cost. Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives by use of straight-line and accelerated methods. Buildings, improvements, and equipment are depreciated over lives ranging from 5 to 40 years. Improvements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Upon disposal of depreciable property, the appropriate property accounts are reduced by the related costs and accumulated depreciation. The resulting gains and losses are reflected in the consolidated statement of activities. Impairment of Long-Lived Assets The Organization reviews its buildings, improvements, and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be
- 18 -
Powered by FlippingBook