<p>Does anyone know that the line item “deposits with bond trustees” means on a non-profit’s Balance Sheet? It is in the non-current assets section. I know the organization has issued some bonds through the city, and has also done an interest rate swap agreement to stablize the interest rate they pay. But I just don’t know what that line item means… I tried to Google & Wiki, no luck in finding a definition. Thanks!</p>
<p>See if you can find Taxguy. He posts at the Financial Aid Forum sometimes.</p>
<p>It is probably one, or a combination, of three things: (1) money that has been deposited with a bond trustee to pay principal and interest on bonds, but where the payment date has not yet arrived, (2) money that is held by the bond trustee as a reserve to provide security for future principal and interest payments – sometimes revenue streams from specific projects have to go directly to the bond trustee, and are released to the borrowing organization only when and to the extent that reserve adequacy tests are met, or (3) money that has been received for issued bonds, but which has not yet been used on the project to which the bonds relate, and is being held by the trustee pending such use. If the financial statements you are looking at are audited, there will be extensive footnotes following them, and I guarantee that one (or more) of the footnotes will address this line item on the balance sheet and provide an analysis of it. It may be a general footnote on cash and deposits, or a footnote describing financing, or the general footnote 1 on accounting policies.</p>
<p>Because this is a non-profit, the financial statements printed in the annual report are not as thorough as you might see elsewhere (eg, no footnotes…). I’m sure the actual audit report describes it, I just don’t have access to that. I looked over the 990 form, couldn’t tell from that, either. </p>
<p>But I don’t actually have to know which scenario it is, I just need to know what the possibilities are, so your answer is exactly what I needed. Thank you!</p>
<p>I have been teaching the financial and managerial intro courses for the last 20 years and my knowledge above that level has evaporated considerably, but I’m going to vote/guess with JHS’s options 1 or 2. If you were talking about a C corp, I would assume we were talking about sinking fund bonds (option 1) for sure.</p>