Quote:
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Originally Posted by Randy Bauer
Quote:
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Originally Posted by DACP
Also, it was pointed out to me that in reality we have even a larger
loss. What is not inherently obvious here is that management has
"recognized" deferred life membership income this year for about
$104k. This isn't cash that we received. This is just a paper
transfer. Without it, our loss would be even greater.
Donna Alarie
Massachusetts Delegate
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You lost me there, Donna. I'm looking at the detailed P&L for
February and not seeing the $104k. The figure listed for Life
Membership revenue through February is a little under $87k, which is
similar to the figure listed for the previous fiscal year (almost $115
k; $87k is 75% of $115k, and we have 25% of the fiscal year left).
There is a little uptick in Sustaining Membership revenue (almost $29k
compared to almost $31k for the entirety of the previous fiscal year),
but I'm not seeing how this year's numbers are remarkably different
from last year's. Am I missing something? (which is asked in all
earnestness) |
I will tell you what it is, as I understand it.
When a life member purchases his life membership and pays $1000, most
of that money is supposed to go into the LMA.
Then, the LMA assumes that the life member will live for 20 years.
Therefore, 1/20th of that money should be paid back to operations
every year.
Based upon this, the LMA is supposed to be paying $104,000 to
operations this year.
However, over the past seven years, operations has been borrowing
money from the LMA almost every year.
Therefore, the $104,000 the LMA is supposed to be paying this year
will not be paid in real money. Instead, the "debt" that operations
owes to the LMA will be reduced by $104,000.
So, that is why this money is called "fantasy money". It does not
exist.
The problem is that this $104,000 is apparently being booked in as
revenues. In other words, instead of losing $168,000 by the end of
February, we may be losing $272,000 in real money.
That raises the questions that Donna wants answered.
Sam Sloan