The Cornerstone Christian Academy

“Beneficial interest in endowment fund in may 2000, the academy entered into a beneficial interest in endowment fund (the fund) via an irrevocable agreement with the philadelphia foundation (the foundation), a non-related entity. The original agreement stated that the foundation is to retain and reinvest 100% of the income annually until the fund reached $300,000. The foundation lowered the requirement on the school's beneficial interest in endowment fund restriction from $300,000 to $50,000 in february 2010, thereby permitting the school to receive distributions from the fund. The spending rate in effect when the fund does reach $50,000 provides the foundation to annually disburse 5% of the average quarterly value of the fund. Distributions from the fund shall be used for general operational expenses, which includes, but is not limited to, student financial aid, capital improvements, and curriculum development.”

“The academy adheres to the provisions of fasb asc 740, income taxes (asc 740). Asc 740 establishes rules for recognizing and measuring tax positions taken in an income tax return, including disclosures of uncertain tax positions (utps). Asc 740 mandates that companies evaluate all material income tax positions for periods that remain open under applicable statutes of limitation, as well as positions expected to be taken in future returns. The utp rules then impose a recognition threshold on each tax position. A company can recognize an income tax benefit only if the position has a "more likely than not" (i.e., more than 50 percent) chance of being sustained on its technical merits. For the years ended june 30, 2014 and 2013, the academy has taken no material tax positions on its applicable tax filings that do not meet the more likely than not threshold. As a result, no amount for utps has been included in the financial statements. The academy believes it is no longer subject to income tax examinations prior to 2011.”