Page 33 - RFCUNY Annual Report 2016

Equipment purchased by the Foundation on behalf of various units of the University from grant
and contract funds is to be used in the project for which it was purchased and is not included in the
Foundation’s fixed assets on the accompanying consolidated balance sheets.

(i) Purchase Accounting for Acquisition of Real Estate
The fair value of the LLC’s acquired rental property was allocated to the acquired tangible assets, con-
sisting of land and building; and identified intangible assets and liabilities, consisting of the value of
above-market and below-market leases, other value of in-place leases, and value of tenant relationships,
based in each case on their fair values.
(j) Deferred Costs
Deferred financing costs, were incurred in obtaining long-term financing for the LLC. Such costs are
being amortized on a straight-line basis over the term of the related debt and are recorded as a compo-
nent of interest expense.
In 2016, the Organization early adopted ASU No. 2015-03, Simplifying the Presentation of Debt
Issuance Costs, which requires debt issuance costs related to a recognized debt liability to be presented
on the balance sheets as a direct deduction from the debt liability. The Organization applied the provi-
sions of the update retrospectively to 2015.

(k) Restricted Cash
Restricted cash of the LLC includes amounts to be funded for tenant improvements, repairs, real estate
taxes, and insurance as required by the LLC’s loan agreement. Restricted cash also includes tenant
security deposits held in accordance with tenant leases and other tenant deposits held for improvements
to leased space.
(l) Deposits Held in Custody for CUNY Colleges
Deposits held in custody for CUNY colleges reflect those resources held on behalf of the individual col-
leges of the University. These deposits are credited with facilities and administrative cost, released time,
summer salary recoveries, CUNY Charitable Gift Trust Annuity, and interest income for the respective
colleges.
Released time recoveries represent personal service costs for individuals on the various colleges’
payroll who report effort under grants or contracts. When colleges replace an individual providing time
and effort to sponsored projects, the schools will also process the payroll for the replacements (adjuncts)
and the Foundation will reimburse the school. The reimbursement of personal service costs is reflected
as deductions of deposits held in custody for CUNY.
Facilities and administrative costs are considered recoveries of the specific colleges and, accordingly, are
credited to deposits held in custody for CUNY colleges.

(m) Fair Value Measurements
Fair value is determined as the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants as of the measurement date. The Organization mea-
sures the fair value of its financial assets using a three-level hierarchy for fair value measurements based
on the observable inputs to the valuation of an asset or liability at measurement date. It prioritizes the
inputs to the valuation techniques used to measure fair value by giving the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (Level 1 measurements), and the lowest
priority to measurements involving significant unobservable inputs (Level 3 measurements).

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