THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2017 and 2016 __________
Three of NHPF’s affiliated entities, Asmara, Foxwood Preservation, and St. Luke’s Preservation, use derivatives to manage risk and the economic impact related to interest rate movements. While the derivatives are mitigating the potential interest rate risk, as a nonprofit entity, the Organization is not permitted to use hedge accounting for its interest rate swap contracts (swaps). Asmara was sold in 2017 and as of December 31, 2017, the two remaining swap contracts were reported at fair value and were included in other liabilities on the consolidated statement of financial position. The gains or losses resulting from the change in fair value of the swaps are shown as decreases or increases, respectively, to interest expense on the related mortgage notes. Rent Revenue Rent revenue is recorded as rents become due. Rent payments received in advance are deferred until earned. All leases between the rental housing communities and its tenants are operating leases. Contributions and Grants Contributions are recognized when the donor makes a promise to give to the Organization that is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restriction. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets, 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 unrestricted support only to the extent of actual expenses incurred in compliance with grantor-imposed restrictions. Grants received in excess of expenses incurred are shown as temporarily restricted net assets 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 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
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