Music Library Association: notes to financial statements.

June 30, 2003 And 2002

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION -- The Music Library Association was formed in 1945 as a non-stock, non-profit corporation. The purposes of the Association are to promote the establishment, growth, and use of music libraries; to encourage the collection of music and musical literature in libraries; to further studies in musical bibliography; to increase efficiency in music library service and administration; and to promote the profession of music librarianship.

BASIS OF ACCOUNTING -- The Association's policy is to prepare its financial statements on the accrual basis of accounting. Revenues are recognized in the period in which they are earned. Expenses are recognized in the period in which the related liability is incurred.

The financial statements have been prepared in accordance with Statement of Financial Accounting Standards (SFAS) No. 116, Accounting for Contributions Received and Contributions Made. Under SFAS No. 116, contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted support depending on the existence and/or nature of any donor restrictions.

The financial statements have been prepared in accordance with Statement of Financial Accounting Standards (SFAS) No. 117, Financial Statements of Not-for-Profit Organizations. Under SFAS No. 117, the Association is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. In addition, the Association is required to present a Statement of Cash Flows.

ACCOUNTS RECEIVABLE -- The Board is of the opinion that all of the Association's accounts receivable are fully collectable and no allowance for doubtful accounts is required.