Notes to the combining financial statements: (Amounts Expressed In Thousands).

• Position: 2009 annual report

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

The California Society of Certified Public Accountants (Society) is a nonprofit incorporated membership organization whose purpose is to advance the profession of accountancy in the State of California. The Society provides its members with general and technical resources through its chapters and committees. California Certified Public Accountants Education Foundation (Foundation) is a nonprofit public benefit corporation organized to provide continuing professional education to Certified Public Accountants (CPAs) and other interested parties. Revenues for both the Society and the Foundation are derived primarily from CPAs in California. The Society and the Foundation share some administrative functions. Such costs are allocated between the entities based on their estimated share. The California CPA Institute (the Institute), a nonprofit organization under Internal Revenue Code Section 501 (c) (3), was formed in October 2004 to account for scholarship activities and financial literacy programs. The activities of the Institute are included in the Society. The Institute is governed by the Society's Board of Directors.

PRINCIPLES OF COMBINATION--The Board of Trustees of the Foundation consists of members of the Society who are elected by the governing Council of the Society. Because of common control, the accompanying financial statements reflect the combining of the Society and the Foundation.

BASIS OF PRESENTATION--The financial statements are presented in conformity with Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-For-Profit Organizations.

REVENUE RECOGNITION--Membership dues are recognized as revenue over the membership period. Peer review registration fees are recognized over the calendar year. Peer review processing and review fees are recognized when review engagements are completed. Revenues from professional education programs are recognized in the periods the programs are held. Advertising revenues are recognized when the services are rendered. Revenues collected in advance are deferred until earned.

CASH AND EQUIVALENTS--For financial statement purposes, the Society and the Foundation consider all investments with maturity at purchase of three months or less to be cash equivalents.

ALLOWANCE FOR DOUBTFUL ACCOUNTS--Management periodically reviews the collectability of its accounts receivable and establishes an allowance for doubtful accounts as necessary. Management considers factors such as historical experience, credit quality, the age of the accounts receivable balances in determining the appropriate allowance. The allowance totaled $11 for the Society at April 30, 2009 and 2008, and totaled $6 for the Foundation at April 30, 2009 and 2008.

INVESTMENTS--Investments are stated at fair value. Unrealized and realized gains and losses are included in investment income reported on the combining statements of activities. Investment income (loss) is reported net of related investment expenses.

PROPERTY AND EQUIPMENT--Property and equipment are stated at cost and depreciated or amortized using the straight-line method over estimated useful lives of 3 to 10 years. Leasehold improvements are amortized over the lease term.

DEFERRED LEASE COSTS--Rent expense is recognized on a straight-line basis over the lives of the leases. Deferred lease costs represent rent expense recognized in excess of rental payments made.

Other Income--Includes event sponsorships for various state committee meetings and conferences.

ADVERTISING COSTS--Advertising costs consist primarily of radio advertisements, catalogs and brochures for educational seminars and other events. Advertising costs are capitalized as other current assets and charged to expense in the period the events occur. Other advertising costs are expensed as incurred.

DONATED SERVICES--Members of the Society donate their time to various activities of the Society and the Foundation, including the leadership of the organizations, committees, chapters and member events. The value of this donated time is not reflected in the combining financial statements since it does not meet the criteria for recognition as a contribution.

INCOME TAXES--The Society is exempt from income taxes under Internal Revenue Code (IRC) Section 501 (c)(6) and related California code sections. The Institute and the Foundation are both exempt from income taxes under Internal Revenue Code (IRC) Section 501(c)(3) and related California code sections. However, the organizations are subject to income taxes from activities unrelated to their tax-exempt purposes. The Foundation is considered a publicly supported organization.

FUNCTIONAL EXPENSES--The costs of providing the program services and supporting services have been summarized on a functional basis in the statements of activities and functional expenses. Accordingly, certain costs are for services shared between the Society and Foundation.

COMPENSATED ABSENCES -Accumulated paid time off is accrued when incurred.

USE OF ESTIMATES--The preparation of financial statements in conformity with accounting principles...