WHEREAS, the NACDL Board of Directors has previously mandated a contribution to a designated fund (commonly referred to as "reserves") equaling 1.5% of the previous Fiscal Year's gross revenues.
WHEREAS, more precisely, NACDL's "reserves" are its net assets, namely, its unrestricted total assets less unrestricted total liabilities at any given date, and are contained in NACDL's balance sheet and are referred to as "unrestricted net assets."
WHEREAS, the attached letter dated February 1, 2002, from NACDL's auditors (Langan Associates) and an attached document (entitled, "Point Paper Reserves") further describe and clarify the definition of "reserves."
WHEREAS, according to basic accounting principles, in order to designate an amount from reserves, a surplus of net assets must exist.
WHEREAS, the Board of Directors directs the continued growth of NACDL's reserves in order to enhance its financial strength.
NOW, THEREFORE, BE IT RESOLVED:
The Board of Directors reaffirms the policy to contribute any amount up to 1.5% of the previous Fiscal Year's gross revenue to a designated separate account, but only in those Fiscal Years in which there is total net revenue.