Boston Harbor Island Alliance Inc Harvard Case Solution & Analysis

ORGANIZATION BACKGROUND

Boston Harbor Island Alliance, Inc. is a well-known not for profit organization. The core purpose of the organization is to serve the people of Boston by creating and conducting public events in the Boston Harbor Islands National Park. The organization facilitates the people by organizing parties and social gatherings in which people can enjoy and entertain themselves.

The organization’s main goal is to develop the park by arranging and efficiently managing different resources from private and public sector. The Organization manages to attract private sector investment and upkeep to improve public consciousness and use of the Boston Harbor Islands national park area, and helps provide the necessary strategic and financial resources to develop and manage the park. The organization makes different strategies to create awareness among the public and private sectors. The organization attracts the private sector to gather funds and resources to develop the park.

Moreover, the Organization invites and manages funds for admittance, refreshment, and ecological lineups and plans, and supports state and federal agencies with executing amenities (e.g. water transportation, food and beverage, etc.)

SIGNIFICANT ACCOUNTING POLICIES

It is the policy of the organization that when any gift of cash is received by the donor and the donor has placed certain provisions and conditions on the donated asset which limits the use of the donated asset to an extent then the organization records such assets as restricted assets. There is a policy of the organization to reclassify the assets as unrestricted assets, which are previously classified as temporarily restricted assets upon the expiration of the time restriction or upon the satisfaction of the program restriction.

The Unconditional promises to give, which the top management of the organizations feels will be collected or fulfilled in one year are valued at their net realizable value. On the other hand, unconditional promises to give which the top management of the organization feels that these will be collected or received after the period of one year are recorded on the basis of present value of the cash flows that are estimated to be received.

The discounts with respect to these amounts are calculated using risk-adjusted interest rates. These rates are connected to the years in which the promises are received. The contribution revenue of the organization also consists of amortization of discounts. The organization’s policy of recording contingent or conditional promises is such that the organization does not records the conditional or contingent promises as support or revenue until such conditions are fulfilled.

The organization receives Government grants for the capital and revenue expenditures. The organization has a policy to record government grants upon the amount of expenditure made by the organization. The organization follows the terms and conditions of cost reimbursement agreements in which the organization recognizes the government grants in parallel with the occurrence of the expenditures.

The receivable of government grants shows the amounts to be received by grants for the costs which have been incurred but are not yet reimbursed. They will be reimbursed by the amount of Government grants.

The organization conducts special events and also records revenue from special events. These special events are such that it includes Regatta and Gala. These special events also include silent auctions. The organization has a policy to deduct all expenses which are relevant to the special event and should be deducted from the gross revenue of the special event, and show only net benefit to donors which is derived by the special event. The organization does not show the gross revenue of these special events.

The organization is also engaged in few activities from which it generates cash to support and finance its operations. These activities include cruise facilities and tour of the island as well as recreational activities and food and catering. The organization has a policy to record the cash generated from such activities only when it is earned. Moreover, the organization records such cash as earned income.Boston Harbor Island Alliance Inc Case Solution

Other than the cash gifts and cash generating activities, the organization also receives supports which are non-monetary in nature i.e. the organization receives the support in the form of contributed services as well as also in the form of other assets.

The organization has a policy to recognize the contributed services on the basis of the predefined recognition criteria. The predefined recognition criteria of the organization is such that the organization will recognize the contributed services if the services received creates or enhances fixed assets, i.e. it adds value to the fixed assets of the organization. The organization will also record contributed services, if the contributed services are such that those services are mandatory as well as necessary, if they are not provided by donation then the organization will have to purchase those services, and they require specialized skills. ...............

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