Notes to Consolidated Financial Statements June 30, 2024 and 2023 Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures, sets forth a framework for measuring fair value, which includes a hierarchy based on the observability of inputs used to measure fair value and provides for specific disclosure requirements based on the hierarchy. Fair Value Hierarchy ASC 820 requires the categorization of financial assets and liabilities, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs. The various levels of the ASC 820 fair value hierarchy are described as follows: Level 1—Financial assets and liabilities with values that are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the university has the ability to access. Level 2—Financial assets and liabilities with values that are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. Level 3—Financial assets and liabilities with values that are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Investments are carried at fair value. The fair value of alternative investments that contain certain provisions has been estimated using the Net Asset Value (NAV), as reported by the management of the respective alternative investment fund. Accounting guidance provides for the use of NAV as a practical expedient for estimating fair value of alternative investments that contain certain provisions. Accordingly, NAV reported by each alternative investment fund is used to estimate the fair value of the university’s interest. Accounting for Uncertainty in Income Taxes The university follows the guidance contained in ASC 740, Income Taxes. ASC 740 addresses the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a threshold of more-likely-than-not for recognition and de-recognition of tax positions taken or expected to be taken in a tax return. There were no uncertain tax positions recorded in the consolidated financial statements for fiscal years 2024 or 2023. Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60), requiring entities holding crypto assets meeting the criteria in ASU 2023-08 to subsequently measure these in-scope crypto assets at fair value with the remeasurement recorded to the change in net assets. Further, the new guidance requires the separate presentation of in-scope crypto assets from other intangible assets on the statement of financial position. The new guidance should be applied using a modified retrospective transition method with a cumulative-effect adjustment recorded to the opening net assets balance as of the beginning of the year of adoption. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. The university does not expect the new guidance to have a material impact on its consolidated financial statements. In August 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60), requiring a joint venture to initially measure all contributions received upon its formation at fair value. This new guidance is intended to reduce the diversity in practice. It does not apply to the formation of joint ventures that are determined to be not-for-profit entities or entities that may be proportionally consolidated 22
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