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 Donated property and equipment is recorded as support at estimated fair value at the date of donation and is reported as support without donor restrictions unless the donor has restricted the use of the donated asset to a specific purpose. Insurance Programs The university is partially self-insured for workers’ compensation benefits, wholly owns an offshore captive insurance company (see Note 17), participates in partially owned insurance entities and benefit associations, and maintains claims-made insurance policies with respect to certain other coverage. Liabilities for these claims are recorded based on actual loss history and actuarial calculations that include provisions for estimated losses incurred, but not reported, and the portion of insurance risk that has not been transferred to insurance carriers. Accrued insurance costs, net of 3 percent discount, approximated $17.8 million at June 30, 2022, and $16.9 million at June 30, 2021, of which $5.5 million and $4.1 million is included in other current liabilities as of June 30, 2022 and 2021, respectively. Undiscounted costs at June 30, 2022 and 2021, were $18.3 million and $17.5 million, respectively. Investments in insurance entities and benefit associations are accounted for under the equity method and are included in other assets and approximated $12.8 million at June 30, 2022, and $13.0 million at June 30, 2021. Endowment Payout and Value The university’s investment policy provides that up to 5 percent of the market value of NSU’s endowment fund be made available annually for expenditure. Absent donor stipulations to the contrary, no distributions are made from an individual endowment until the account reaches a minimum of $25,000. Until that time, all earnings are reinvested. In addition, there is a one-year holding period from the time an individual endowment is funded until it is available for distribution. NSU’s endowment assets include the endowment fund, consisting of cash and investments, as well as endowmentrelated pledges receivable. At June 30, 2022, endowment-related pledges receivable were $39.2 million, and the fair value of the endowment fund was $161.6 million, representing total endowment assets of $200.8 million. At June 30, 2021, endowment-related pledges receivable were $37.8 million, and the fair value of the endowment fund was $189.2 million, representing total endowment assets of $227.0 million. The endowment fund includes donorrestricted and board-designated endowments. Any declines in the fair value of donor-restricted endowments below their respective historical cost value are recorded as reductions in net assets with donor restrictions. Tuition and Fees Tuition and fees are reported net of scholarships and discounts. For fiscal 2022 and 2021, total scholarships and discounts were $125.6 million and $115.6 million, respectively. Tuition and fee revenue is recognized on a pro rata daily basis over the term of instruction. Unearned student tuition and fees relating to future instructional periods are recorded as current deferred revenue. Deferred tuition revenue was $71.5 million at June 30, 2022, and $65.0 million at June 30, 2021. Tuition and fees receivables are net of an allowance for uncollectible balances based on management’s judgment, past collection experience, and other relevant factors. Contributions Unconditional contributions are recorded as increases in net assets without donor restrictions. Unconditional contributions with donor-imposed stipulations are reported as increases to net assets with donor restrictions, and reclassified to net assets without donor restrictions when stipulations are satisfied. Contributed assets to be maintained in perpetuity are classified as net assets with donor restrictions. Income from donor-restricted assets is classified according to the terms of the contribution. Conditional pledges are not recognized until the conditions are met. 19
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