Lenbrook Square Foundation Inc.

“The organization's form 990 is reviewed by the cfo, ceo, accounting director and members of the finance committee. Changes are made, if applicable, and a copy of the reviewed form 990 is distributed to board members prior to filing.”

“The organization has a conflict of interest policy which defines a conflict of interest, explains how disclosure of potential conflicts should be facilitated and the procedures to manage conflicts. Annually, board members are required to reaffirm in writing their interest to continue on the board and their knowledge of our conflict of interest policy and recusal form if they perceive they may have a potential conflict.”

“The organization has a compensation policy for officers and key employees which outlines the review and approval process, the use of comparable data and the recording of compensation decisions. The compensation committee of the board reviews and approves recommendations of compensation for key employees, comparable market data and lenbrook's compensation plan.”

“The organization provides a copy of governing documents, conflict of interest policy and financial statements to the public upon request. Documents are made available by arrangement with the individual requesting the documents.”

“During 2012, fasb accounting standards codification ("asc") 954 was clarified, which changed certain prior guidance for the accounting for refundable entrance fees. Under the pre-clarified guidance in fasb asc 954, entrance fees were divided into 2 categories: 1) non-refundable or declining refund, which are classified as deferred revenue and amortized into income accordingly and 2) refundable portion and 100% fully refundable fees, which are reported as liabilities and not amortized into income. The guidance included a provision that stated "the portion of refundable entrance fees that will be repaid to current residents only to the extent of the proceeds of re-occupancy of a contract holder's unit shall be accounted for as deferred revenue, provided that legal and management policy and practice support the withholding of refunds under this condition." this provision is by which the foundation has treated the refundable portion of entrance fees as deferred revenue and been amortizing the amounts into income, because it is expressly included in the resident agreement. The clarification in fasb asc 954 of the above described provision adds that not only must the resident agreement include wording that the refund is given after the unit is reoccupied, but it must also explicitly state that the refund is also limited to the proceeds from re-occupancy of the unit. Otherwise, the refundable portion of a resident's advance fee must be carried as a liability that is not amortized into income. Prior to the clarification, refundable fees were accounted for on the statement of financial position under the title deferred revenues from advance fees and amortized into income over the remaining useful life of the building. The foundation adopted the clarified provisions of fasb asc 954 as of the stated effective date (fiscal year beginning after december 15, 2012, which, for the foundation, is the year ended june 30, 2014), and, per the requirements of the statement, has applied the changes retrospectively with a cumulative adjustment to opening unrestricted net asset deficiency as of the beginning of the earliest period presented in the financial statements, july 1, 2012. Upon adoption, certain refundable fees that were previously recognized in revenues have been recaptured as a part of the ending liability balance and are no longer amortized into income. The effect was to increase the liability and increase unrestricted net asset deficiency by $28,132,483 as of july 1, 2012. Additionally, the previously issued 2013 financial statements have been restated to reduce reported revenues by $4,919,059 and to increase the reported liability by $33,051,542.”