# LCMS Convention Workbook_St. Louis Missouri_1975_S165
# Machine transcription, uncorrected — CHI Digital Archive (demonstration)

ADMINISTRATION 159

NOTES TO FINANCIAL STATEMENTS
THE LUTHERAN CHURCH - MISSOURI SYNOD

January 31, 1975 and January 31, 1974

Note A - SIGNIFICANT ACCOUNTING POLICIES
Fund Groupings

The financial transactions and assets and liabilities of The Lutheran
Church - Missouri Synod are accounted for using the principles of fund accounting.
The following four fund groupings are used:

Current Funds - Used to account for the budgeted operation
of Synod and record transactions in specific and agency
funds.

Loan Funds - Used to record funds available, loan activity
and site acquisition for church extension.

Property Funds - Used to record funds employee for capital
expenditure purposes and to reflect investment in Synod
owned property and related entit-es.

Trust Funds - Used to record funds for which Synod is
acting as trustee.

Investment in Securities

Investments are recorded at cost. Bond premiums and discounts are nor
amortized as the effect is not significa

Land, Buildings and Equipment

Investment in land, buildings and equipment :s stated at cost with the
exception of deaf miss.on properties which are stated at appraised values estab-
lished in 1961 and subsequent additions at cost.

The cost of furniture, fixtures and equipment is charged to expense
rather than capitalizing such items. This accounting treatment has not had a
significant effect on the financial statementa.

The Synod follows the policy of recoré:ng no depreciation on the
propert:es.

Investments in capital assets of foreign mission fields are not
recorded.

NOTES TO FINANCIAL STATEMENTS - CONT'D

Note A - SIGNIFICANT ACCOUNTING POLICIES - CONT'D
Investment in Educational Properties and Other Entities

Investments in college and seminary properties and teleted notes and loans
pavable are shown at the amounts as recorded on the books of the various colleges
and seminaries at December 31.

Investment in other related entities are recorded generally at the under-
lying net asset values as of January 31, except for Concordia Publishing House
which is recorded as of its fiscal year end, April 30.

income Recognition

Income is recognized in the general current fund as unrestricted con-
tributions are received from districts, individuals and agencies.

Receipts for specific purposes are recorded in specific funds until used
for the purpose designated. If the use is covered by a budgeted expenditure the
amount ia transferred from specific funda and recognized as income in the current
funds as expended,

Amounts received as unrestricted bequests sre recorded as current fund
income or additions to the capital project funds in accordance with resolutions
of the Board of Directors.

Nore B - DISPOSAL CF COMMERCE BUTLDING

On January 31, 1973, the Commerce Building was sold with the purchaser
assuming the balance ‘$862,0641 of a note secured by a first deed of trust, and
issuing to Synod a 6-1 2, promissory note for $434,815 with a second deed of
trust as collateral, During the vear ended January 31, 1974, the property was
acquired by the holder of the first deed of trust under a foreclosure crocedure
by reason of default cf payment by the new owner which action terminated Synod's
deed of trust and therefore the ncte receivable was written off,

Note ¢ ~ COMPLIANCE WITH SECURITY AND BANKING LAWS

The Church Extension Department of The Lutheran Church - Missouri
Synod is proceeding forward in its continuing efforts to comply with both the
securities law and the banking laws of the various states throughout che United
States. These efforts include appropriate registration of its investment