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(d) Investments
Investments are recorded at fair value based on quoted market prices.
(e) Fair Value of Financial Instruments
Fair value of all other financial instruments approximates their reported value due to the immediate or short-term maturity of these financial instruments.
(f) Inventory
Inventory is stated at the lower of cost or market and consists primarily of videocassettes of educational programming. Cost is determined using the average cost method, which approximates the first-in first-out method.
(g) Property and Equipment
Property and equipment are recorded at cost and depreciated on the straight-line basis over the following estimated useful lives:
| Building |
45 years
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| Satellite transponder |
12 years |
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| Broadcasting equipment |
4-8 years |
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| Furniture and computer equipment |
3-8 years |
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| Leasehold improvements |
Term of lease |
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Contributed property is recorded at estimated fair value at the date of contribution.
In fiscal year 2000, PBS prospectively revised the estimated useful lives for certain broadcasting equipment from 8 to 4 years and computer equipment from 5 to 3 years. PBS also eliminated salvage values associated with equipment. These changes in estimates resulted in additional depreciation expense of approximately $9.5 million in 2000.
(h) Revenue and Expense Recognition
 Member Program Assessments - PBS member stations pay an annual assessment for access to, and the related broadcast rights of, PBS's annual National Program Service, consisting of approximately 2,700 hours of programming and related promotion. The PBS National Program Service member station assessment is recognized in the period in which the related services are provided.
Revenue from other programming funds is recognized to the extent of expenses incurred. Expenses incurred to acquire programming are accounted for in the manner described below for amortization of broadcast rights. Funds received in excess of expenses incurred are reflected as deferred revenue.
Amortization of Broadcast Rights - PBS capitalizes the cost of purchased broadcast rights (obtained principally through the National Program Service), charging such rights to expenses when the program is made available to member stations for initial broadcast.
Member Service Assessment - Member Service Assessment revenue is recognized in the period in which the related services are provided.
Contracts and Grants - Unconditional contracts and grants, classified as contributions, are recognized as unrestricted or temporarily restricted net assets, in accordance with the donor's restrictions, in the period received or when the promise is made, if earlier.
Conditional promises are recorded as revenue when the conditions have been met. As of June 30, 2001, PBS has outstanding conditional promises of approximately $19.8 million.
Revenue for grants and contracts classified as exchange transactions are recognized in the year funds are received, to the extent of expenses incurred. When cumulative expenses incurred in accordance with the contract and grant provisions are in excess of cumulative receipts, the excess is accrued and reflected as an account receivable with a corresponding credit to revenue, to the extent that total revenue does not exceed the grant award or contract amount. When cumulative receipts are in excess of cumulative expenses, the excess is reflected as deferred revenue.
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There are five parts to the financial statements.
Click on a link below to go to that section.
1. Independent Auditors’ Report
2. Consolidated Statements of Financial Position
3. Consolidated Statements of Activities
4. Consolidated Statements of Cash Flows
5. Notes to Consolidated Financial Statements
(6 pages, page 2 of 6 above)
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