The church's auditors, the firm of Coopers and Lybrand, L.L.P., completed the audit of our 1996 financial statements.
Once again Coopers issued an unqualified opinion. This means that in their opinion, the financial statements of the church accurately portray the financial position of the church in a manner that conforms with generally accepted accounting principles.
Coopers usually issues the church's financial statements in the late spring or early summer. This year, however, the audit was delayed.
The reason for the delay concerns the closure of Ambassador University. The decision to close the university was announced in December 1996, and this necessitated additional auditing procedures in order to issue the 1996 audit.
These procedures were made more difficult because much of the work for the audit had to be accomplished after most of the university's accounting personnel had been terminated.
Notwithstanding the delay, the audited financial statements have been issued, and the church has once again received an unqualified opinion.
The financial statements show the church, PTM, and the university received just over $53 million in income from all sources in 1996. Although the church's operations were accomplished with expenditures less than income--resulting in a surplus for church functions--Ambassador University ran a deficit.
The deficit consisted of both a real loss resulting from expenses exceeding revenues and a paper loss from a write-down of the university's physical asset value as a consequence of the church's decision to sell the Texas campus.
The cash losses, plus the write-downs resulting from the decision to sell the university, together resulted in a negative change in the consolidated net book assets of the church of about $17 million for the year ended Dec. 31, 1996.
Of course, the actual market value of the church's combined property holdings in Pasadena and Big Sandy is considerably greater than the total book value listed on the financial statements.
This is because accounting rules require property values to be written down under some circumstances but do not allow them to be written up to market value (even if that market value is far above the book value) unless and until an actual sale is consummated.
The 1996 audited financial statements of the church are 17 pages long. Because of their length, the decision was made not to publish them in The Worldwide News this year.
Nonetheless, in accordance with our policy, a copy of Coopers' report will be sent to any member of the church who requests it from me, Bernie Schnippert, at the Office of Finance here at 300 W. Green St., Pasadena, California, 91123.
Jan. 27, 1998, WN, page 19
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