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SMITHSONIAN INSTITUTION 



Notes to Financial Statements 



September 30, 2000 



($ millions) 



The preparation of financial statements in conformity with accounting principles generally 

 accepted in the United States of America requires management to make estimates and 

 assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 

 assets and liabilities at the date of the financial statements and the reported amounts of revenues 

 and expenses during the reporting period. Actual results could differ from those estimates. 



(b) Federal Funds 



Federal appropriations revenues are classified as unrestricted and recognized as exchange 

 transactions as expenditures are incurred. The liability for unexpended appropriations represents 

 amounts received by the Smithsonian which have not been obligated or for goods or services it 

 has ordered but not received. The net assets of federal funds consist primarily of the 

 Smithsonian's net investment in property and equipment purchased with or constructed using 

 federal funds. 



The Smithsonian was appropriated $371.2 for operations and $66.9 for construction or repair and 

 restoration of facilities in fiscal year 2000. Federal appropriations for operations are generally 

 available for obligation only in the year received. In accordance with Public Law 101-510, these 

 appropriations are maintained by the Smithsonian for five years following the year of 

 appropriation, after which the appropriation account is closed and any unexpended balances are 

 returned to the U.S. Treasury. During fiscal year 2000, the Smithsonian returned $2.9 to the U.S. 

 Treasury which represented the unexpended balance of appropriations for operations for fiscal 

 year 1995. 



Federal appropriations for construction or repair and restoration of facilities are generally 

 available for obligation until expended. 



(c) Trust Funds 



Net assets and revenues, expenses, gains and losses of trust funds are classified based on the 

 existence or absence of donor-imposed restrictions. Accordingly, the net assets of trust funds are 

 classified and reported as follows: 



Unrestricted 



Net assets that are not subject to any donor-imposed or other legal stipulations on the use 

 of the funds. Funds functioning as endowments in this category represent unrestricted 

 assets which have been designated by management or the Board for long-term investment. 



Temporarily restricted 



Net assets subject to donor-imposed stipulations that may be met by actions of the 

 Smithsonian and/or the passage of time. Funds functioning as endowments in this 

 category represent donor-restricted contributions that have been designated by 

 management or the Board for long-term investment. 



