Kents Hill School

“Kents hill school is exempt from federal income tax under section 501(c)(3) of the internal revenue code. However, income from certain activities not directly related to the school's tax-exempt purpose is subject to taxation as unrelated business income. In addition, the school qualifies for the charitable contribution deduction under section 170(b)(1)(a)(ii). Effective july 1, 2009, the school adopted the provisions of fasb interpretation no. 48, accounting for uncertainty in income taxes (fin 48, as codified by asc 740, income taxes). This statement clarifies the criteria that an individual tax position must satisfy for some or all of the benefits of that position to be recognized in the organization's financial statements. Asc 740 prescribes a recognition threshold of more likely-than-not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those tax positions to be recognized in the financial statements. Management evaluated the school's tax positions and concluded that the school had taken no uncertain tax positions that required adjustment to the financial statements to comply with the provisions of this guidance. As a result, there was no cumulative effect related to adoption and no interest or penalties related to uncertain tax positions were accrued. When necessary, the school accounts for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes. The school does not expect that unrecognized tax benefits arising from tax positions will change significantly within the next twelve months. The school is currently open to audit under the statute of limitations by the internal revenue service and state taxing authorities for the years ending june 30, 2012 through 2015.”

“Cost of goods sold netted with revenues 173,059 rental expenses netted with revenues 247,801 change in fair value of interest rate swaps 102,496 ski hill rental expenses netted with revenue 24,313”

“Student financial aid 2,863,900 investment fees netted with income 49,179”

“Cost of goods sold netted with revenues 173,059 rental expenses netted with revenues 247,801 ski hill rental expenses netted with revenue 24,313”

“Student financial aid 2,863,900 investment expenses 49,179 book / tax depreciation difference 1”