|
PAGE:
1
2
3
4
5
6
 Video - Revenue from sales of videos is recognized in the period in which the videos are shipped to the customer. Royalties from sales of videos are recorded in the period they are earned.
Adult Learning Service - Revenue from the Adult Learning Service is recognized in the period in which the related services are provided.
Software - PBS recognizes revenue from software licenses, net of an allowance for estimated returns and cancellations, at the time the software is fully operational and all significant vendor obligations have been met. Revenue from consulting and other software-related services is recognized ratably over the contract term.
(i) Advertising Expenses
PBS expenses the costs of advertising, except for direct-response advertising, which is deferred and amortized over its expected period of future benefit.
Direct-response advertising consists primarily of printing, mailing and postage expenses related to PBS's videocassette business. Deferred advertising costs are amortized over a five-month period. At June 30, 2001 and 2000, approximately $.6 million and $.5 million, respectively, of direct-response advertising costs were deferred and included in prepaid expenses in the accompanying consolidated statements of financial position. Total videocassette advertising expense was approximately $5.6 million in both 2001 and 2000.
(j) Income Taxes
PBS is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code except for unrelated business income, if any. PBS's wholly-owned subsidiary, PBS ENTERPRISES, INC., is subject to tax.
(k) Allocation of Costs
The costs of providing programs and support services have been summarized in the statements of activities. Accordingly, certain costs have been allocated among the programs and support services benefited.
(l) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates and assumptions may also affect the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
(m) Reclassifications
Certain amounts included in the 2000 consolidated financial statements have been reclassified to conform to the 2001 presentation.
(2) Description of Functional Activities
The following is a description of PBS's functional activities:
Programming - represents approximately 3,400 hours of broadcast services provided by PBS to its 170 member public television licensees that is dedicated to inform, inspire, engage, and educate. This expense category includes staff and related costs connected with administering programming, including content oversight, program scheduling and packaging.
Promotion - represents all the institutional and program promotion and press efforts with the goal of increasing awareness of the value of public television among all segments of the American people. These activities provide public television stations with a broad array of promotional support, including on-air promotional spots, print and radio advertising, press support in Alexandria and New York, and coordination of public television's educational message and positioning.
Satellite Interconnection and Engineering - represents the scheduling and logging of all satellite feeds; media center handling, technical evaluation and other pre-transmission processing of all program videotapes; and approximately 22,500 hours per year of program origination transmission, including operational support for news and other live event coverage. This expense category also includes other technical research, planning and management, and management of excess satellite transponder capacity.
NEXT PAGE: 4
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 page, page 3 of 6 above)
|
