are recorded as temporarily restricted revenue in the period received. The donor's 

 restrictions expire and the related net assets are released from restriction when the 

 long-lived asset is placed in service by the Smithsonian. 



In-kind contributions of goods and services totaling $6,310,000 were received in 

 fiscal year 1998 and recorded as program support in the accompanying statement of 

 financial activity. The nature of the in-kind contributions primarily includes donated 

 space and interactive multimedia software programs. 



A substantial number of volunteers also make significant contributions of time to the 

 Smithsonian, enhancing its activities and programs. In fiscal year 1998, more than 

 5,600 volunteers contributed over 496,000 hours of service to the Smithsonian. The 

 value of these contributions is not recognized in the financial statements. 



(p) Advancement 



The Smithsonian raises private financial support from individual donors, corporations 

 and foundations to fund programs and other initiatives. Funds are also generated 

 through numerous membership programs. Fund-raising costs are expensed as incurred 

 and reported as advancement expense in the statement of financial activity. Member- 

 ship program costs are amortized over membership terms, typically one year, and are 

 also reported as Advancement expenses. 



(q) Comparative Financial Statements 



The statement of financial activity includes certain prior-year summarized comparative 

 information in total but not by net asset class. Such information does not include 

 sufficient detail to constitute a presentation m conformity with generally accepted 

 accounting principles. Accordingly, such information should be read in conjunction 

 with the Smithsonian's financial statements for the year ended September 30, 1997, 

 from which the summarized information was denved. 



(r) Reclassifications 

 Certain amounts have been reclassified in pnor year to conform with the current year 

 presentation. 



(3) Receivables and Advances 



Receivables and advances consisted of the following at September 30, 1998: 



I SOU K 



Auxiliary activities, net of Sl.590.000 in allowances 



Contributions receivable, net 



Grants and contracts 



Interest and dividends due 



Advance payments 



Charitable trust 



Total receivables and advances 



(a) Contributions Receivable 



Contributions receivable (pledges) are recorded as revenue when received. Pledges for 

 which payment is not due within one year are discounted based on United States 

 Treasury risk-free obligation rates according to their corresponding terms. As of Sep- 

 tember 30, 1998, the aggregate discounted contributions receivable was as follows: 



Trust 



Federal 



Total 



18.011 





18.011 



33.789 



— 



33.789 



13.264 



— 



13,264 



660 



— 



660 



1.171 



16.066 



17.237 



2.565 



— 



2.565 



69.460 



16.066 



85.526 



SIJ'.V'- 



Due within: 



Less than I year 

 1 to 5 years 

 More than 5 years 



Less: 



Allowance for uncollectible pledges 

 Discount to present value 



Contributions receivable, net 



14.079 

 21.596 



5.964 



41.639 



(4,356.) 



3.4^4 i 



Salaries and 

 Expenses 



Repair and 



Restoration and 



Construction 



Total 



331.484 

 49.723 



(46.724) 

 (1.075) 



61,548 



68.850 



(61.548) 



393.032 



118.573 



(108,272) 



(1.075) 



333.408 



68.850 



402.258 





Repair and 





Salanes and 



Restoration and 





Expenses 



Construction 



Total 



331.426 



31 .527 



362.953 



49.723 



68.850 



118.573 



(6.966) 



(31,527) 



(38.493) 



82 



— 



82 



(219) 



— 



(219) 



(277) 



— 



(277) 



(46,724) 



(61,548) 



(108,272) 



7.438 



61.548 



68.986 



(1.0751 



— 



(1.075) 



-. ■ 4(1!: 



68.850 



402.258 



Fedetal appropriation revenue 

 Unexpended 1 998 appropnauon 

 Amounts expended from pnor years 

 Other funding 



Fiscal year 1998 federal 

 appropriations 



Federal expenses recognized in fiscal year 1998 can be reconciled to the federal appro- 

 priations received in fiscal year 1998 as follows: 



Federal expenses 



Unexpended 1998 appropnauon 



Depreciation 



Supplies consumption 



Loss on disposition of assets 



Unfunded annual leave 



Amounts expended from pnor years 



Capital expenditures 



Other funding 



Fiscal year 1998 federal 

 appropnations 



Federal unrestricted net assets primarily represent the Smithsonian's net investment 

 in property, plant and equipment purchased with or constructed using federal appro- 

 priated funds. 



Unexpended appropriations for all fiscal years total $182,623,000 at September 30, 

 1998, and consist of $73,332,000 in unexpended operating funds and $109,291,000 in 

 unexpended repair and restoration and construction funds. Unexpended operating 

 funds include amounts for the Museum Support Center move and the National 

 Museum of the American Indian. Unexpended repair and restoration funds represent 

 amounts available for on-going major repair and restoration of the Smithsonian's 

 museums and facilities. Unexpended construction funds represent amounts appropri- 

 ated but not yet expended for construction of new facilities. 



(5) Accessions and Deaccessions 



For fiscal year 1998, S6,938,000 of trust funds and $1,893,000 of federal funds were 

 spent to acquire collection items. Proceeds from trust fund deaccessions were 

 $737,000. There were no deaccessions of collection items purchased with federal 

 funds in fiscal year 1998. At September 30, 1998, accumulated proceeds and related 

 earnings from deaccessions of $16,269,000 were designated for collections acquisition 

 in the trust funds. 



Non-cash deaccessions result from the exchange, donation, or destruction of collec- 

 tion items, and occur because objects deteriorate, are beyond the scope of a museum's 

 mission, or are duplicative. During fiscal year 1998, the Smithsonian's noncash 

 deaccessions included works of art. animals, historical objects, and natural specimens. 

 Contributed items held for sale total $4,300,000 and are reported as other assets in the 

 statement of financial position. 



(6) Investments 



At September 30, 1998, investments consisted of the following: 



Short-teim investments: 

 Cash equivalents 

 U.S. Government obligations 



16.407 

 24.625 



At September 30, 1998, the Smithsonian has outstanding conditional contributions 

 totaling $14,000,000 which will be recognized when the specific conditions are met. 



(b) Advance Payments 



At September 30, 1998, federal advance payments of $16,066,000 represent prepay- 

 ments made to government agencies, educational institutions, firms and individuals 

 for services to be rendered, or property or materials to be furnished. 



At September 30, 1998, Smithsonian advance payments included amounts paid to 

 the General Services Administration of $8,512,000 for equipment purchases for the 

 Museum Support Center and other projects to be completed in future years. 



(4) Reconciliation of Federal Appropriations 



Federal appropriation revenue recognized in fiscal year 1998 can be reconciled to the 

 federal appropriations received in fiscal year 1998 as follows: 



Endowment and similar investments: 

 Pooled investments: 

 Cash equivalents 



U.S. Government and quasi-govemroeni obligations 

 Corporate bonds and other obligations 

 Common and preferred stocks 



Total pooled investments 



Nonpooled investments: 



Deposits with U.S. Treasury 



Total endowment and similar investments 



Gift annuity program investments: 

 Coiporate bonds and other obligations 

 Common and preferred stock 



Total investments 



5.270 

 55.731 

 169.779 



373.146 



603.926 

 1.050 



604.976 



140 

 307 



292 



