SOCC, INC. dba
SEVEN OAKS COUNTRY CLUB
NOTES TO FINANCIAL STATEMENTS
Income and franchise taxes: The Club is a not-for-profit corporation, exempt under Section 501(c)(7) of the Internal Revenue Code from federal income taxes on all income other than net income derived from nonmember activities. For California franchise tax purposes, the Club, under Section 23701g of the California Code, is an exempt, not-for-profit corporation and is required to pay franchise taxes on net income from nonmember revenue in excess of 15% of total revenue. Nonmember revenues accounted for 10.2% and 4.6%, of the total gross revenue of the Club for the years ended December 31, 2022 and 2021, respectively. The Club has adopted the accounting standard on accounting for uncertainty in income taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under the guidance the Club may recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods.
Advertising : The Club expenses advertising costs as incurred. Advertising expense totaled $19,487 and $17,728 for the years ended December 31, 2022 and 2021, respectively.
Authoritative pronouncement adopted: In September 2020, the FASB issued ASU 2020-07, Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets , which requires a not-for-profit entity to present contributed nonfinancial assets in the statement of activities as a line item that is separate from contributions of cash or other financial assets. ASU 2020-07 also requires additional qualitative and quantitative disclosures about contributed nonfinancial assets received, disaggregated by category. The adoption of ASU 2020-07 did not have a significant impact on the Club ’ s financial statements.
Reclassifications : Certain items in the 2021 financial statements have been reclassified to conform to the 2022 presentation, with no effect on change in net assets.
Subsequent events: The Club has evaluated subsequent events through April 21, 2023, the date on which the financial statements were available to be issued. No events were identified by management which would require disclosure in the financial statements.
Note 2. Availability and Liquidity
The following represents t he Club’s financial assets at December 31, 2022 and 2021:
2022
2021
Financial assets at year end: Cash and cash equivalents
$ 1,913,070
$ 1,847,212
Accounts receivable
1,090,975
505,765
Employee Retention Credit receivable
600,488 18,250
-
Membership fees receivable
11,750
Financial assets available to meet general expenditures over the next twelve months
$ 3,622,783
$ 2,364,727
The Clu b’s goal is g enerally to maintain financial assets to meet thirty days of operating expenses (approximately $1,020,000).
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