2019 NSU Annual Report

No t e s t o Co n s o l i d a t e d F i n a n c i a l S t a t eme n t s J u n e 3 0 , 2 0 1 9 a n d 2 0 1 8 incurred, but not reported, and the portion of insurance risk that has not been transferred to insurance carriers. Accrued insurance costs, net of 3 percent discount, approximated $11.4 million at June 30, 2019, and $9.5 million at June 30, 2018, of which $1.9 million and $1.1 million is included in other current liabilities as of June 30, 2019 and 2018, respectively. Undiscounted costs at June 30, 2019 and 2018, were $12.1 million and $10.1 million, respectively. Investments in insurance entities and benefit associations are accounted for under the equity method and are included in other assets and approximated $10.4 million at June 30, 2019, and $10.5 million at June 30, 2018. Endowment Payout and Value The university’s investment policy provides that up to 5 percent of the market value of NSU’s endowment fund be made available annually for expenditure. Absent donor stipulations to the contrary, no distributions are made from an individual endowment until the account reaches a minimum of $25,000. Until that time, all earnings are reinvested. In addition, there is a one-year holding period from the time an individual endowment is funded until it is available for distribution. NSU’s endowment assets include the endowment fund, consisting of cash and investments, as well as endowment- related pledges receivable. At June 30, 2019, endowment-related pledges receivable were $38.3 million, and the fair value of the endowment fund was $132.5 million, representing total endowment assets of $170.7 million. At June 30, 2018, endowment-related pledges receivable were $41.4 million, and the fair value of the endowment fund was $119.7 million, representing total endowment assets of $161.1 million. The endowment fund includes donor-restricted and board-designated endowments. Any declines in the fair value of donor-restricted endowments below their respective historical cost value are recorded as reductions in net assets with donor restrictions. Tuition and Fees Tuition and fees are reported net of scholarships and discounts. For fiscal 2019 and 2018, total scholarships and discounts were $79.8 million and $63.9 million, respectively. Tuition and fee revenue is recognized on a pro rata daily basis over the term of instruction. Unearned student tuition and fees relating to future instructional periods are recorded as current deferred revenue. Deferred tuition revenue was $58.8 million at June 30, 2019, and $60.3 million at June 30, 2018. Tuition and fees receivables are net of an allowance for uncollectible balances based on management’s judgment, past collection experience, and other relevant factors. Contributions Unconditional contributions are recorded as increases in net assets without donor restrictions. Unconditional contributions with donor-imposed stipulations are reported as increases to net assets with donor restrictions, and reclassified to net assets without donor restrictions when stipulations are satisfied. Contributed assets to be maintained in perpetuity are classified as net assets with donor restrictions. Income from donor-restricted assets is classified according to the terms of the contribution. Conditional pledges are not recognized until the conditions are met. Contributions to be received more than one year in the future are discounted based on a risk-adjusted discount rate. Amortization of the discount is recorded as contribution revenue and used in accordance with donor-imposed stipulations, if any. Any additional allowance made for uncollectible contributions is based on management’s judgment, past collection experience, and other relevant factors. Government Grants Revenue from grants is recognized as the related expenses are incurred. Grant revenue recognized and expended within the same fiscal year is included as revenue with donor restrictions and net assets released from restrictions in the accompanying Consolidated Statements of Activities. 38

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