Financials. Institute of Management Accountants, Inc. and Affiliates

Transcription

1 Financials Institute of Management Accountants, Inc. and Affiliates Combined Financial Statements and Supplemental Information Years Ended June 30, 2015 and 2014 The report accompanying these financial statements was issued by BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of BDO International Limited, a UK company limited by guarantee.

2 Contents Independent Auditor s Report 3-4 Combined Financial Statements: Statements of Financial Position as of June 30, 2015 and Statements of Activities for the Years Ended June 30, 2015 and Statements of Cash Flows for the Years Ended June 30, 2015 and Notes to Combined Financial Statements 8-18 Supplemental Information: Combined Supplemental Information Five-Year Summary as of June 30, Combined Supplemental Information Revenues and Expenses by Area of Activity for the Year Ended June 30,

3 Independent Auditor s Report Board of Directors of Institute of Management Accountants, Inc. and Affiliates Montvale, New Jersey Report on the Financial Statements We have audited the accompanying combined financial statements of Institute of Management Accountants, Inc. and Affiliates, which comprise the combined statements of financial position as of June 30, 2015 and 2014, and the related combined statements of activities and cash flows for the years then ended, and the related notes to the combined financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. 3

4 Opinion In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Institute of Management Accountants, Inc. and Affiliates as of June 30, 2015 and 2014, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audits of the combined financial statements were conducted for the purpose of forming an opinion on those statements as a whole. The supplementary information presented on pages 19 through 22 of this report is presented for purposes of additional analysis and is not a required part of the combined financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the combined financial statements. The information has been subjected to the auditing procedures applied in the audits of the combined financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the combined financial statements or to the combined financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the combined financial statements as a whole. October 2,

5 Combined Statements of Financial Position June 30, Assets Current: Cash and cash equivalents $ 5,661 $ 6,775 Investments, at fair value (Note 4) 16,672 16,218 Accounts receivable, net of allowance for bad debt of $50 and $60 for the years ended 2015 and 2014, respectively Other current assets (Note 5) Prepaid expenses Total Current Assets 23,724 24,231 Fixed Assets, Net (Note 6) 2,968 2,662 $26,692 $26,893 Liabilities and Net Assets Current Liabilities: Accounts payable and accrued expenses $ 2,891 $ 2,987 Accrued payroll and related benefits 1,723 1,437 Deferred revenues - membership dues 5,428 5,236 Deferred revenue - other Current portion of accrued postretirement benefits (Note 7) Total Current Liabilities 10,545 10,399 Accrued Postretirement Benefits, Less Current Portion (Note 7) 1,311 1,206 Total Liabilities 11,856 11,605 Commitments and Contingencies (Notes 7 and 8) Net Assets: Unrestricted: IMA: Current operating fund Reserve fund 6,020 5,680 ICMA 5,564 6,356 IMAMEF: Board designated Undesignated 2,811 3,036 IMARF 113 (15) Total Unrestricted Net Assets 14,836 15,288 $26,692 $26,893 See accompanying notes to combined financial statements. 5

6 Combined Statements of Activities Year ended June 30, (Unrestricted) Program Revenues: Examination fees $13,166 $11,289 Membership dues, fees and contributions 9,904 9,840 Education programs 2,131 1,747 Conferences 1,157 1,039 Affinity program royalties and interest group products 1, Advertising and sales of publications Other Total Program Revenues 28,065 25,503 Expenses: Program services directly charged: Payments to chapters Chapter and member services 1, Publications and information center 3,201 2,687 Education programs 1,457 1,516 Continuing education conferences, webinars and events 920 1,157 Professional and academic relations CMA/CFM program 6,355 5,312 Total Program Services Directly Charged 13,858 12,251 Shared program services: Marketing 3,810 3,402 International and domestic membership development 4,244 3,821 Total Shared Program Services 8,054 7,223 Total Program Services 21,912 19,474 Supporting services: Administration and occupancy (Note 9) 6,476 6,283 Other Total Supporting Services 6,882 6,696 Total Expenses 28,794 26,170 Change in Net Assets From Operations (729) (667) Net Investment Income (Notes 4 and 5) 253 2,407 Change in Net Assets Before Change in Unfunded Accumulated Benefit Obligation (476) 1,740 Change in Unfunded Accumulated Benefit Obligation (Note 7) Change in Net Assets (452) 1,801 Net Assets, Beginning of Year 15,288 13,487 Net Assets, End of Year $14,836 $15,288 See accompanying notes to combined financial statements. 6

7 Combined Statements of Cash Flows Year ended June 30, Cash Flows From Operating Activities: Change in net assets $ (452) $ 1,801 Adjustments to reconcile change in net assets to net cash provided by operating activities: Change in unfunded accumulated benefit obligation (24) (61) Depreciation and amortization Realized gains on sales of investments at fair value (665) (1,055) Unrealized losses (gains) gains on investments at fair value 732 (1,010) Unrealized loss in investment in COSO (Increase) decrease in assets: Accounts receivable (175) 17 Other current assets (36) (191) Prepaid expenses (4) (2) Increase (decrease) in liabilities: Accounts payable and accrued expenses (96) 655 Accrued payroll and related benefits Deferred revenue - membership dues 192 (144) Deferred revenue - other (223) 45 Accrued postretirement benefits Net Cash Provided By Operating Activities 295 1,144 Cash Flows From Investing Activities: Purchases of fixed assets (888) (259) Purchases of investments (6,809) (7,979) Proceeds from sales of investments 6,288 7,739 Net Cash Used In Investing Activities (1,409) (499) Net (Decrease) Increase in Cash and Cash Equivalents (1,114) 645 Cash and Cash Equivalents, Beginning of Year 6,775 6,130 Cash and Cash Equivalents, End of Year $ 5,661 $ 6,775 See accompanying notes to combined financial statements. 7

8 Notes to Combined Financial Statements 1. Nature of Organization Institute of Management Accountants, Inc. ( IMA ) is an organization that provides members an opportunity to increase their knowledge of accounting practices and methods and to increase their individual capabilities through professional education programs and accounting literature that are available to all members. 2. Principles of Combination The combined financial statements include the accounts of IMA, the Institute of Certified Management Accountants, Inc. ( ICMA ), the Institute of Management Accountants Research Foundation, Inc. ( IMARF ) and the Institute of Management Accountants Memorial Education Fund, Inc. ( IMAMEF ) (collectively, IMA and Affiliates ) who are related through common board membership and substantially identical management. In combination, all significant interfund balances have been eliminated. (a) Institute of Management Accountants, Inc. IMA maintains operating and reserve funds as follows: (i) (ii) (b) Institute of Management Accountants, Inc. Current Operating Fund The Current Operating Fund supports current operations of IMA and its subsidiary, IMA Services, Inc., a for-profit subsidiary required to maintain a representative office in China. The subsidiary was established in furtherance of IMA s tax-exempt purposes. At June 30, 2015 and 2014, the net assets of the Current Operating Fund were $228 and $131, respectively. Institute of Management Accountants, Inc. Reserve Fund The Reserve Fund was established for the purpose of providing funds to ensure the continuous extension and development of activities in general furtherance of the purpose of IMA. Appropriations from the Reserve Fund require the approval of the Board of Directors. At June 30, 2015 and 2014, the net assets of the Reserve Fund were $6,020 and $5,680, respectively. Institute of Certified Management Accountants, Inc. ICMA administers the Certified Management Accountant credentialing program of IMA. At June 30, 2015 and 2014, the net assets were $5,564 and $6,356, respectively. (c) Institute of Management Accountants Research Foundation, Inc. IMARF was created to administer the research program of IMA. At June 30, 2015 and 2014, the net assets (deficit) were $113 and $(15), respectively. (d) Institute of Management Accountants Memorial Education Fund, Inc. The net assets of IMAMEF include the Memorial Fund, the Stuart Cameron McLeod Fund, the Heckert Scholarship Funds and the Howard Siers Ethics Memorial Fund. The funds are administered by the Board of Trustees of IMAMEF. 8

9 Notes to Combined Financial Statements (i) (ii) Memorial Funds The Memorial Fund ( Fund ) was established for the purpose of supporting and furthering the educational goals of IMA. Earnings on Fund investments may be expended for research and educational purposes. At June 30, 2015 and 2014, the net assets were $207 and $223, respectively. The Howard Siers Ethics Memorial Fund was established to accept contributions to further the ethics program. Net assets for the Fund as of June 30, 2015 and 2014 were $41 and $44, respectively. Scholarship Funds The Scholarship Funds include bequests from Stuart Cameron McLeod, Josiah Brooks Heckert and Eileen Heckert. Income of the funds has been used for scholarship and other educational programs. At June 30, 2015 and 2014, the total net assets of the Scholarship Funds were $2,663 and $2,869, respectively. During the years ended June 30, 2015 and 2014, IMAMEF expended $83 and $47, respectively. 3. Summary of Significant Accounting Policies (a) Cash and Cash Equivalents IMA and Affiliates consider financial instruments with original maturities of 90 days or less, when purchased, to be cash equivalents. (b) Financial Statement Presentation The classification of a not-for-profit organization s net assets and its support, revenue and expenses is based on the existence or absence of donor-imposed restrictions. It requires that the amounts for each of three classes of net assets - permanently restricted, temporarily restricted, and unrestricted - be displayed in a statement of financial position and that the amounts of change in each of those classes of net assets be displayed in a statement of activities. These classes are defined as follows: (i) (ii) (iii) (iv) Permanently Restricted Net assets resulting from contributions and other inflows of assets whose use by IMA and Affiliates is limited by donor-imposed stipulations that neither expire by passage of time nor can be fulfilled or otherwise removed by actions of IMA and Affiliates. At June 30, 2015 and 2014, IMA and Affiliates did not have any permanently restricted net assets. Temporarily Restricted Net assets resulting from contributions and other inflows of assets whose use by IMA and Affiliates is limited by donor-imposed stipulations that either expire by passage of time or can be fulfilled and removed by actions of IMA and Affiliates pursuant to those stipulations. When such stipulations end or are fulfilled, such temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities. At June 30, 2015 and 2014, IMA and Affiliates did not have any temporarily restricted net assets. Unrestricted Board Designated Net assets consist of all monies or assets contributed to IMA and Affiliates designated for the support and benefit of the programs and activities of IMA and Affiliates by the Board of Directors. Unrestricted The part of net assets that is neither permanently nor temporarily restricted by donor-imposed stipulations. 9

10 Notes to Combined Financial Statements (c) Fair Value Measurements Financial Accounting Standards Board ( FASB ) Accounting Standards Codification ( ASC ) , Fair Value Measurement, establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that inputs that are most observable be used when available. Observable inputs are inputs that market participants operating within the same marketplace as IMA would use in pricing IMA s asset or liability based on independently derived and objectively determinable market data. Unobservable inputs are inputs that cannot be sourced from a broad active market in which assets or liabilities identical or similar to those of IMA are traded. IMA estimates the price of any assets for which there are only unobservable inputs by using assumptions that market participants that have investments in the same or similar assets would use as determined by the money managers administering each investment based on best information available in the circumstances. The input hierarchy is broken down into three levels based on the degree to which the exit price is independently observable or determinable as follows: Level 1 Valuation based on quoted market prices in active markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Level 2 Valuation based on quoted market prices of investments that are not actively traded or for which certain significant inputs are not observable, either directly or indirectly. Level 3 Valuation based on inputs that are unobservable and reflect management s best estimate of what market participants would use as fair value. (d) Fixed Assets Fixed assets are recorded at cost. All contributed fixed assets are recorded as contributions and are valued at the fair market value of the asset at the time of donation. There were no contributed fixed assets for the years ended June 30, 2015 and Property and equipment are depreciated on the straight-line method over their estimated useful lives. Software is amortized on the straight-line method over its useful life. Building Land improvements Furniture and equipment Software 30 years 20 years 3-10 years 3-5 years Leasehold improvements are amortized over the shorter of the lease or the estimated useful life of the improvement. (e) Revenue Recognition Membership dues are recorded as revenue during the applicable membership period. The portion of such dues which has not been recognized represents the deferred revenue balance at year-end. No portion of such dues is allocated to subscription revenues in the financial statements. Registration and examination fees, which are nonrefundable, are recorded as revenue when paid. Advertising revenues are recorded as revenue when the applicable publications are issued. 10

11 Notes to Combined Financial Statements (f) Income Taxes IMA, IMAMEF, IMARF and IMA Products and Services, LLC were incorporated in the State of New Jersey and are exempt from Federal, state and local income taxes under Section 501(c)(3) of the Internal Revenue Code (the Code ) and therefore have made no provision for income taxes in the accompanying combined financial statements. ICMA is currently exempt from Federal income tax under 501(c)(6) of the Code. IMA, IMAMEF, IMARF, IMA Products and Services, LLC and ICMA have been determined by the Internal Revenue Service not to be private foundations within the meaning of Section 509(a) of the Code. There was no unrelated business income tax payable for the years ended June 30, 2015 and IMA Services, Inc., a for-profit corporation, recognizes income tax expense in accordance with ASC , Income Taxes, which utilizes the asset and liability method. This method requires recognition of deferred income taxes based on temporary differences between the financial reporting and income tax bases of assets and liabilities, using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Since inception, IMA Services, Inc. has reported losses from operations. Due to the uncertainty of IMA Services, Inc. s ability to utilize the deferred tax asset, a full valuation allowance has been recorded. (g) Accounting for Uncertainty in Income Taxes Under ASC 740, Income Taxes, an organization must recognize the tax benefit associated with tax positions taken for tax return purposes when it is more likely than not that the position will be sustained. The organization does not believe there are any material uncertain tax positions, and, accordingly, it has not recognized any liability for unrecognized tax benefits. IMA and Affiliates have filed IRS Form 990 tax returns up to and including fiscal year 2014, as required, and all other applicable returns in jurisdictions where they are required. For the year ended June 30, 2015, there was no interest or penalties recorded or included in the combined statement of activities. (h) Use of Estimates In preparing its financial statements in accordance with accounting principles generally accepted in the United States of America, IMA makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (i) Recently Issued Accounting Pronouncement In May 2015, the FASB issued Accounting Standards Update ( ASU ) , Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share. ASU simplifies Topic 820 by removing the requirement to categorize, within the fair value hierarchy, all investments measured using the net asset value per share practical expedient. Although classification within the fair value hierarchy is no longer required, an entity must disclose the amount of investments measured using the NAV practical expedient in order to permit reconciliation of the fair value of investments in the hierarchy to the corresponding line items in the balance sheet. The amendments are effective retrospectively for all nonpublic entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. (j) Reclassifications Certain prior year balances have been reclassified to be consistent with the current year financial statement presentation. The reclassifications had no impact on the net assets. 11

12 Notes to Combined Financial Statements 4. Investments at Fair Value The following is a summary of investments at fair value and cost at June 30, June 30, 2015 Fair Value Cost Equity securities $ 9,911 $ 8,151 Government and agency securities 2,328 2,298 Corporate bonds 1,199 1,145 Mutual funds 3,234 3,313 Total $16,672 $14,907 The following is a summary of investments at fair value and cost at June 30, June 30, 2014 Fair Value Cost Equity securities $ 9,574 $ 7,276 Government and agency securities 2,345 2,347 Corporate bonds 1,145 1,062 Mutual funds 3,154 1,976 Total $16,218 $12,661 Equity Securities IMA and Affiliates holdings in equity securities are determined by quoted market prices. These investments can be liquidated daily. The valuation of these investments is based on Level 1 inputs within the hierarchy used in measuring fair value. Government and Agency Securities Investments in fixed maturity government and agency securities are comprised of government debt instruments issued by the U.S. Treasury or other government-sponsored enterprise. These securities are valued using quoted market prices and are categorized as Level 1 within the fair value hierarchy. Corporate Bonds IMA and Affiliates have investments in corporate bonds which the custodian prices using nationally recognized pricing services. Since fixed income securities other than U.S. Treasury securities generally do not trade on a daily basis, the pricing services prepare estimates of fair value measurements for these securities using their proprietary pricing applications which include available relevant market information, benchmark curves, benchmarking of similar securities, sector groupings and matrix pricing. These investments are classified as Level 2. Mutual Funds IMA and Affiliates have investments in mutual funds, which are invested primarily in investment-grade bonds. For these investments, IMA has ownership interest in the mutual fund but not in the individual securities held by the fund. The assets of each mutual fund consist primarily of shares of the underlying holdings. Each mutual fund net asset value is the value of a single share which is actively traded on national securities exchanges. The mutual funds are valued on a daily basis at the close of business day. These funds are valued primarily on the basis of market quotation or on the basis of information furnished by a nationally recognized pricing service based on observable market data and are classified as Level 2 within the fair value hierarchy. 12

13 Notes to Combined Financial Statements The following tables are set forth by level within the fair value hierarchy of IMA and Affiliates investments at fair value as of June 30, 2015 and As required by ASC , assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Fair Value Measurement at June 30, 2015 Significant Other Observable Inputs (Level 2) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Unobservable Inputs (Level 3) Balance as of June 30, 2015 Assets Equity: Common stock $ 9,911 $ - $- $ 9,911 Fixed maturities: Government and agency securities 2, ,328 Corporate bonds - 1,199-1,199 Mutual funds*: Opportunities fund - 1,600-1,600 Fixed income - 1,634-1,634 Total $12,239 $4,433 $- $16,672 * Mutual funds fair value estimated using net asset value ( NAV ). Fair Value Measurement at June 30, 2014 Significant Other Observable Inputs (Level 2) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Unobservable Inputs (Level 3) Balance as of June 30, 2014 Assets Equity: Common stock $ 9,574 $ - $- $ 9,574 Fixed maturities: Government and agency securities 2, ,345 Corporate bonds - 1,145 1,145 Mutual funds*: Opportunities fund - 1,250-1,250 Fixed income - 1,904-1,904 Total $11,919 $4,299 $- $16,218 * Mutual funds fair value estimated using net asset value ( NAV ). There were no transfers between levels during the years ended June 30, 2015 and Investments in equity securities with readily determinable fair values and all investments in debt securities are reported at fair value with unrealized gains (losses) included on the combined statements of activities. Investments for which fair value is estimated using reported NAV or the equivalent are able to be redeemed on a daily basis. At June 30, 2015, there were no unfunded commitments. For the years ended June 30, 2015 and 2014, net unrealized (losses) gains on investments were $(794) and $997, respectively. Also included in the net unrealized (losses) gains for the years ended June 30, 2015 and 2014 are $62 and $13, respectively, in unrealized loss relating to IMA s investment in the Committee of Sponsoring Organizations of the Treadway Commission ( COSO ) (Note 5). Interest and 13

14 Notes to Combined Financial Statements dividends, unrealized gains (losses) and net realized gains on sale of investments at fair value are apportioned to the respective funds and are reflected in net assets at June 30, 2015 and Interest, dividends, unrealized gains (losses) on investment at fair value, and net realized gains (losses) on sales of investment at fair value are apportioned to the respective funds and are reflected in net assets at June 30, 2015 and June 30, Interest and dividends $ 495 $ 466 Realized gains on sales of investments 665 1,056 Unrealized (loss) gain on investments (794) 997 Investment fees (113) (112) Total net investment income $ 253 $2,407 The Common Investment Fund ( CIF ) was established to invest pooled funds of the Reserve Fund, the Current Operating Fund, IMAMEF and ICMA for better management and return on investment. In accordance with the Board policy, interest and dividends along with net realized and unrealized gains (losses) on investments from the equities portion of the fixed income portfolio and the cash equivalents of the organization shall be pooled in the CIF and distributed to the underlying funds mentioned above in proportion to the share which each of these funds holds, at cost, of the total investment of the CIF. 5. Other Assets In 1985, IMA entered into a joint venture agreement with four other accounting-related organizations whereby it acquired a 20% noncontrolling interest in COSO. The joint initiative, COSO, is dedicated to providing thought leadership through the development of frameworks and guidance on enterprise risk management, internal control and fraud deterrence. The investment is recorded using the equity method of accounting and is reported in other current assets in the accompanying combined statements of financial position. During the year IMA also recorded a $62 unrealized loss on the investment which is included in net investment income in the accompanying combined statements of activities. For the years ended June 30, 2015 and 2014, IMA s investment in COSO was valued at $183 and $246, respectively. 14

15 Notes to Combined Financial Statements 6. Fixed Assets, Net At June 30, 2015 and 2014, fixed assets, net, consisted of the following: June 30, Land $ 998 $ 998 Land improvements Building 5,076 5,073 Leasehold improvements Furniture and equipment 3,468 3,249 Software 3,269 3,000 Work-in-progress ,318 12,430 Less: Accumulated depreciation and amortization (10,350) (9,768) $ 2,968 $ 2,662 Depreciation expense for the years ended June 30, 2015 and 2014 was $582 and $829, respectively. 7. Postretirement Plans (a) Pension Plan Effective April 1, 1994, IMA established the Employees Retirement Plan ( ERP ) and Employees Savings Plan which are qualified under the Code s Sections 401(a) and 403(b), respectively. Effective January 1, 2000, the ERP was amended and restated to a 401(k) plan and the Employees Savings Plan was frozen. Under the 401(k) plan, eligible employees may contribute a percentage of eligible compensation and IMA will make an appropriate matching contribution. In addition, IMA may also make a profit-sharing contribution to eligible participants at its discretion. IMA contributed $254 and $252 to the 401(k) plan during the years ended June 30, 2015 and 2014, respectively. (b) Other Postretirement Benefits IMA provides certain healthcare and life insurance benefits for eligible retired employees. Substantially all of IMA s employees may become eligible for those benefits if they reach normal retirement age while working for IMA. ASC 715, Accounting for Defined Benefit Pension and Other Postretirement Plans, requires IMA to recognize the funded status of its postretirement plan as a prepaid asset or accrued liability, and to include as part of net assets the net deferred and unrecognized gains and losses related to the plan. Based on the June 30, 2015 and 2014 measurements of plan obligations, IMA reported an increase in net assets of $24 and $61, respectively. 15

16 Notes to Combined Financial Statements Weighted average assumptions used to determine net periodic benefit cost for the years ended June 30, 2015 and 2014: Year ended June 30, Discount rate 4.10% 4.10% Rate of return on plan assets N/A N/A Weighted average assumptions used to determine benefit obligations at June 30, 2015 and 2014: June 30, Discount rate 3.85% 4.10% Rate of return on plan assets N/A N/A Assumed healthcare cost trend rates have significant effect on the amount reported for the healthcare plans. There is no healthcare cost trend assumption since IMA provides a health stipend that is capped. The following table sets forth the status of the postretirement plan as of June 30, 2015 and 2014: Projected benefit obligation for service rendered to date $(1,387) $(1,296) Plan assets at fair value - - Excess of projected benefit obligation over plan assets (1,387) (1,296) Unrecognized transition obligation Unrecognized net actuarial loss (165) (204) Accrued postretirement cost (1,490) (1,375) Unrecognized amounts included in net assets Net amount recognized in the statement of financial position $(1,387) $(1,296) A summary of benefit cost, contributions, and benefits paid for the years ended June 30, 2015 and 2014, is as follows: Year ended June 30, Change in plan assets: Fair value of plan assets at beginning of year $ - $ - Employer contribution Plan participants contributions - - Benefits paid (59) (58) Fair value of plan assets at end of year $ - $ - 16

17 Notes to Combined Financial Statements Net periodic postretirement cost included the following components: June 30, Service cost $ 57 $ 44 Interest cost Amortization of transition obligation Amortization of unrecognized gain - - Net periodic postretirement cost $170 $157 The estimated future benefit payments are as follows: Fiscal year ending 2016 $ Totals for the next 8 years $ Commitments and Contingencies IMA and Affiliates are subject to claims and suits in the ordinary course of business. Management believes that the ultimate resolution of all suit proceedings will not have a material effect on IMA and Affiliates. 9. Administration and Occupancy Expenses Administration and occupancy expenses consisted of the following at June 30, 2015 and 2014: June 30, Executive office $1,512 $1,472 Information technology 1,935 1,717 Finance 1,827 1,952 Building and general services Human resources Total $6,476 $6,283 Of the above totals, $3,335 and $3,133 were for salaries and wages at June 30, 2015 and 2014, respectively. 17

18 Notes to Combined Financial Statements 10. Subsequent Events IMA and Affiliates management has performed subsequent event procedures through October 2, 2015, which is the date the combined financial statements were available to be issued, and there were no subsequent events requiring adjustments to the combined financial statements or disclosures stated herein. 18

19 Supplemental Information

20 Combined Supplemental Information Five-Year Summary June 30, Assets Current Assets: Cash and cash equivalents $ 5,661 $ 6,775 $ 6,130 $ 4,809 $ 4,189 Investments, at fair value 16,672 16,218 13,913 12,489 11,988 Accounts receivable, net of allowance for bad debt Other currents assets Prepaid expenses Total Current Assets 23,724 24,231 21,021 18,108 16,719 Fixed Assets, Net of Accumulated Depreciation 2,968 2,662 3,232 3,868 4,289 $26,692 $26,893 $24,253 $21,976 $21,008 Liabilities and Net Assets Current Liabilities: Accounts payable and accrued expenses $ 2,891 $ 2,987 $ 2,332 $ 1,975 $ 1,940 Accrued payroll and related benefits 1,723 1,437 1,285 1, Deferred revenue - membership dues 5,428 5,236 5,380 5,208 5,026 Deferred revenue - other Current portion of accrued postretirement benefits Total Current Liabilities 10,545 10,399 9,592 8,982 8,590 Accrued Postretirement Benefits 1,311 1,206 1,174 1, Total Liabilities 11,856 11,605 10,766 10,094 9,565 Net Assets: Unrestricted: IMA: Current operating fund (428) 169 Reserve fund 6,020 5,680 4,402 3,582 3,306 ICMA 5,564 6,356 5,490 6,094 5,310 IMAMEF: Board designated Undesignated 2,811 3,036 2,605 2,391 2,559 IMARF 113 (15) (1) Total Unrestricted Net Assets 14,836 15,288 13,487 11,882 11,443 $26,692 $26,893 $24,253 $21,976 $21,008 19

21 Combined Supplemental Information Five-Year Summary Year ended June 30, Program Revenues: Examination fees $13,166 $11,289 $ 8,226 $ 7,360 $ 6,822 Membership dues and fees and contributions 9,904 9,840 9,859 9,204 9,274 Education programs 2,131 1,747 2,113 2,255 2,240 Conferences 1,157 1, Affinity program royalties and interest group products 1, , Advertising and sales of publications Other Total Program Revenues 28,065 25,503 22,881 21,135 20,341 Program Services Directly Charged: Payments to chapters Chapter and member services 1, ,031 Publications and information center 3,201 2,687 2,271 2,047 1,927 Education program 1,457 1,516 1,351 1,394 1,374 Continuing education conferences, webinars and events 920 1, ,141 1,062 Professional and academic relations CMA/CFM program 6,355 5,312 4,036 3,547 3,984 Total Program Services Directly Charged 13,858 12,251 10,004 9,477 11,039 Shared program services: Marketing 3,810 3,402 3,122 2,796 2,494 International and domestic membership development 4,244 3,821 3,192 2,874 1,007 Total Shared Program Services 8,054 7,223 6,314 5,670 3,501 Total Program Services 21,912 19,474 16,318 15,147 14,540 Supporting Services: Administration and occupancy 6,476 6,283 6,154 5,654 5,175 Other Total Supporting Services 6,882 6,696 6,458 5,949 5,444 Total Expenses 28,794 26,170 22,776 21,096 19,984 Change in Net Assets Before Net Investment Income and Unfunded Accumulated Benefit Obligation (729) (667) Net Investment Income 253 2,407 1, ,195 Change in Net Assets Before Unfunded Accumulated Benefit Obligation (476) 1,740 1, ,552 Unfunded Accumulated Benefit Obligation (66) 16 Change in Net Assets $ (452) $ 1,801 $ 1,605 $ 439 $ 2,568 Statistical Data: Percent of contributions, membership dues and fees revenues to total revenues and support 35% 39% 43% 44% 46% Membership at Year-End: Dues-paying members 74,694 68,814 64,047 60,894 56,562 Emeritus Life Associates 4,001 4,107 4,153 4,205 4,256 Total 78,695 72,921 68,200 65,099 60,818 20

22 Combined Supplemental Information Revenue and Expenses by Area of Activity (with comparative totals for 2014) Year ended June 30, IMA, Inc.* Current Operating Fund Reserve Fund Total ICMA IMAMEF IMARF Eliminations 2015 Combined 2014 Combined Membership Services: Revenues $12,300 $179 $12,479 $ - $ 3 $214 $(1,700) $10,996 $10,610 Expenses (4,653) - (4,653) - (83) (86) - (4,822) (4,412) Total Membership Services, Net 7, ,826 - (80) 128 (1,700) 6,174 6,198 CMA/CFM Programs: Revenues , ,166 11,289 Expenses (11,633) - - 1,500 (10,133) (8,520) Total CMA/CFM Programs, Net , ,500 3,033 2,769 Educational Programs: Revenues 2,131-2, ,131 1,747 Expenses (2,068) - (2,068) (2,068) (2,013) Total Education Programs, Net (266) Conferences and Events: Revenues 1,157-1, ,157 1,039 Expenses (1,527) - (1,527) (1,527) (1,639) Total Conferences and Events, Net (370) - (370) (370) (600) Publications and Information Center: Revenues Expenses (3,362) - (3,362) (3,362) (2,890) Total Publications and Information Center, Net (2,813) - (2,813) (2,813) (2,176) Other: Revenues Expenses Total Other, Net Supporting Services: Administration and occupancy (4,058) - (4,058) (2,418) (200) (6,476) (6,283) Other (400) - (400) (6) (406) (412) Total Supporting Services, Net (4,458) - (4,458) (2,424) (200) (6,882) (6,695) Change in Net Assets From Operations (891) (280) (729) (667) * IMA totals include revenue and expense amounts of the subsidiaries, IMA Services, Inc. and IMA Products and Services, Inc. 21

23 Combined Supplemental Information Revenue and Expenses by Area of Activity (with comparative totals for 2014) Year ended June 30, IMA Current Operating Fund Reserve Fund Total ICMA IMAMEF IMARF Eliminations 2015 Combined 2014 Combined Net Investment Income (Loss): Interest and dividends $ - $ 191 $ 191 $ 117 $ 73 $ - $ - $ 381 $ 355 Realized gains ,055 Unrealized gains (losses) (62) (371) (433) (227) (134) - - (794) 997 Total Net Investment Income (Loss) (62) ,407 Change in Net Assets Before Change in Unfunded Accumulated Benefit Obligation (792) (225) (476) 1,740 Change in Unfunded Accumulated Benefit Obligation Net Change in Net Assets $ 97 $ 340 $ 437 $(792) $(225) $128 $ - $ (452) $ 1,801 * IMA totals include revenue and expense amounts of the subsidiaries, IMA Services, Inc. and IMA Products and Services, Inc. 22