RESOLUTION TO REDUCE VALUE OF ARTWORK COLLECTION TO $1.00 ON PHILADELPHIA BAR ASSOCIATION FINANCIAL STATEMENT
WHEREAS, the Philadelphia Bar Association ("Association") has an extensive collection of artwork and historical documents currently valued as an asset on its financial statement in the amount of $1,683,500; and
WHEREAS, prior to 1999 this collection was carried on the Association's financial statement at a value of $1.00; and
WHEREAS, on May 25, 2000, the then-Treasurer of the Association requested that the collection be reflected on the Association's audited financial statement, effective December 31, 1999, at its appraised value; and
WHEREAS, the reason for adding value of the collection to the Association's audited financial statement was to bolster the Association's creditworthiness in the event that a loan would be needed to move the Association's headquarters; and
WHEREAS, the Minutes from the May 25, 2000 Board of Governors meeting indicated that the Association's Auditor, David G. Faw, CPA, "cautioned that, unless the artwork is sold, these are not liquid assets."; and
WHEREAS, in the years following this accounting change, neither a sale of the artwork nor the acquisition of a loan occurred; and
WHEREAS, periodic appraisals necessitated, at times, raising and lowering the value of the artwork, causing large swings in unrealized gains and losses to the audit; and
WHEREAS, the possible cost of commissions should any of the items in the art collection be sold were never taken into account due to their variability depending upon the method of sale; and
WHEREAS, there is now a consensus amongst Association leadership that carrying the collection at the appraised value does not provide the transparency now appropriate to a nonprofit agency; and
WHEREAS, the Association's financial statement should more clearly reflect the actual cash liquidity of the Association; and
WHEREAS, the Association leadership has been advised by its Auditor that it is within generally accepted accounting principles to lower the value of the collection items to $1.00.
NOW, THEREFORE, BE IT RESOLVED that the art collection items referred to in the Association's financial statement be reduced in value to $1.00, consistent with the desired transparency of the Association as a nonprofit organization and an accurate reflection of the Association's actual financial liquidity.
PHILADELPHIA BAR ASSOCIATION
BOARD OF GOVERNORS
ADOPTED: April 29, 2015