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9 <br /> THE BOTANICAL GARDEN FOUNDATION, INC. <br /> NOTES TO FINANCIAL STATEMENTS <br /> Page 3 of 13 <br /> SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br /> I. Property and Equipment. <br /> The Foundation capitalizes acquisitions of property and equipment in excess of $500. <br /> Purchased equipment is recorded at cost; donated equipment is recorded at fair market <br /> value on the date of the gift. Depreciation is computed over the assets' estimated useful <br /> lives using the straight-line method. <br /> Gifts of long-lived assets with explicit restrictions that specify how the assets are to be <br /> used and gifts of cash or other assets that must be used to acquire long-lived assets are <br /> reported as restricted support. Absent explicit donor stipulations about how long those <br /> long-lived assets must be maintained, the Foundation reports expirations of donor <br /> restrictions when the donated or acquired long-lived assets are placed in service. <br /> J. Collections. <br /> Collection items acquired either through purchase or donation are not capitalized. <br /> Purchases of collection items are recorded as decreases in unrestricted net assets if <br /> purchased with unrestricted assets and as decreases in temporarily restricted net assets if <br /> purchased with donor-restricted assets. Contributions of collection items are not <br /> recognized in the statement of activities. <br /> K. Income Tax Status. <br /> The Foundation is exempt from income tax as a not-for-profit organization under Section <br /> 501(c)(3) of the Internal Revenue code and is classified as other than a private <br /> foundation. <br /> L. Estimates. <br /> The preparation of financial statements in conformity with accounting principles <br /> generally accepted in the United States of America requires management to make <br /> estimates and assumptions that affect reported amounts of assets and liabilities, and <br /> disclosure of contingent assets and liabilities at the date of the financial statements, as <br /> well as the reported amounts of revenues and expenses during the reporting period. <br /> Actual results could differ from those estimates. <br />