No t e s t o Co n s o l i d a t e d F i n a n c i a l S t a t eme n t s J u n e 3 0 , 2 0 2 2 a n d 2 0 2 1 Deferred Debt Issue Costs Costs related to the issuance of debt ($4.8 million at June 30, 2022, and $3.9 million at June 30,2021) are being amortized over the term of the related debt instrument using the bonds outstanding method, which approximates the effective interest method. In accordance with the Financial Accounting Standards Board’s (FASB’s) Accounting Standards Update (ASU) 2015-03, Interest—Imputation of Interest (Subtopic 835-30), debt issuance costs are presented in the Consolidated Statements of Financial Position as a direct deduction from the carrying amount of the related debt, consistent with the presentation of debt discounts and premiums. Split Interest Agreements These agreements with donors consist primarily of charitable remainder annuity trusts, unitrusts, and gift annuities. Contributions receivable from remainder trusts The university is the beneficiary of trusts held and administered by others. The current values of estimated future cash receipts from the trusts are recognized in accordance with donor stipulations as assets and contributions with donor restrictions when NSU is notified of the establishment of the trust. Changes in the fair values of the trusts are recorded as other revenue with donor restrictions within the Consolidated Statements of Activities. Due to beneficiaries under remainder trusts and annuities NSU is a trustee for trust assets, which are included in investments. Contribution revenues are recognized, in accordance with donor stipulations, when the trusts are established, after recording liabilities for estimated future payments (discounted over the donor’s or other beneficiary’s life expectancy using published mortality tables). These liabilities are adjusted annually for changes in asset values and estimated future benefits. The university has entered into arrangements whereby assets are transferred from a donor, with purpose restrictions, to the university in exchange for a promise by the university to pay fixed amounts for a specified period of time to the donor or to other donor designees. The difference between the assets received and the estimated future payments (discounted over the specified period of time the payments are to be made) is recognized as contributions with donor restrictions. Changes in split interest agreements, which are reflected as other revenue in the Consolidated Statements of Activities, decreased by approximately $52,000 for fiscal 2022, and increased by approximately $54,000 for fiscal 2021. At June 30, 2022 and 2021, amounts due to beneficiaries under annuity agreements were approximately $105,000 and $111,000, respectively. No amounts were due to beneficiaries under remainder trusts at June 30, 2022 and 2021. Land, Buildings, and Equipment Land, buildings, and equipment are recorded at acquisition cost or fair value at the date of donation and are subsequently carried net of accumulated depreciation. Equipment expenditures in excess of $5,000 with an estimated useful life of two or more years are capitalized. Property and equipment under finance leases are initially valued and recorded based on the present value of the minimum lease payments. Depreciation is calculated using the straight-line method over the assets’ estimated useful lives, ranging from 4 to 50 years, except for leasehold improvements and property and equipment under finance leases, which are amortized over the shorter of the expected useful life of the asset or the term of the related lease. NSU reviews long-lived assets for impairment when events or circumstances indicate the carrying amount will not be fully recoverable, based on estimated future cash flows. Interest on capital projects is capitalized during the construction period. 18
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