Norwood School Inc.

“Endowment is made up of two categories: board designated and permanently restricted. Board designated net assets are made up of jessica lewis lustine, edward b. Marsh scholarship, rosa scott fund for the performing arts and computer learning. Permanently restricted net assets are donor-restricted endowment funds and all earnings for the endowment are temporarily restricted until appropriated for expenditures by the board of directors.”

“The school is generally exempt from federal income taxes under the provisions of section 501(c)(3) of the internal revenue code. In addition, the school has been determined by the internal revenue service not to be a private foundation. Income that is not related to exempt purposes, less applicable deductions, is subject to federal and state income taxes. During the year ended june 30, 2014, the school had no taxable unrelated business income, and accordingly, no provision for income taxes is required in the accompanying financial statements. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet, along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statement of activities. The school files income tax returns in the u.s. Federal jurisdiction and the state of maryland. As of june 30, 2014, and for the year then ended, there were no material unrecognized/derecognized tax benefits or tax penalties or interest. Generally, the school is no longer subject to tax examinations by tax authorities for years before 2011.”

“Tuition foregone in lieu of financial aid -1,524,028.”

“Fundraising expenses reported on line 8b, part viii -80,101.”

“Fundraising expenses reported on line 8b, part viii 80,101.”

“Tuition foregone in lieu of financial aid 1,524,028.”