TWHBEA Identifies Financial Positives And Concerns


Lewisburg, TN - The Tennessee Walking Horse Breeders’ And Exhibitors’ Association (TWHBEA) conducts a review of its financials each year. One aim of this annual review is to identify key positives and key areas of concern. This year, a special request was made to TWHBEA Accountant Greg Cook to detail what he considered the Association’s top three financial positives and its three areas of greatest financial concern. “As we consider our year-end financials we search for ways to improve. I asked our accountant, Greg Cook, to give us a few of the best observations and most concerning observations about the year just completed,” says TWHBEA President Marty Irby.


Financial Positives:

1.  Membership Dues - $453,388 for Fiscal Year 2010-11 represents the first year without a decline in several years. In fact, TWHBEA is the only major breed registry to show membership growth from 2010 to 2011, as illustrated in the attached charts. States President Irby, “We are delighted to be the only major breed registry to show a growth in membership last year. We are proud of our loyal members and our hard-working staff for this fine honor. We continue to work on customer service, ease of doing business with us, and finalizing our on-line registration program.”



2.  Cash On Hand - From the State of Cash Flows, the cash on hand increased by $25,446 for the year. This is very positive considering the current climate in the industry and economy.



3.  Decreasing Expenses - Management and General Expenses were decreased by $118,626 in Fiscal Year 2010-11.


Financial Concerns:

1.  Lab Fees - By Board action in 2007, when the transition from blood-typing to DNA testing was undertaken, TWHBEA wrote off all old outstanding blood-typing liabilities. In addition, the Board elected to expense the cost of the transition rather than amortize it over time. Because these two events off-set each other, the net result was a “wash” (it did not affect or cause the income statement to be misstated).



2.Because TWHBEA continued to process those blood typing kits that were previously written off, the liability account for DNA testing was reduced over time and in the 2009-10 fiscal year, the liability account was understated. As soon as this was discovered immediate action was taken to restore the liability account and amortize the blood-typing to DNA testing transition costs over time. Adding expiration dates to all blood typing kits will allow for an end date for the transition.



3.  Items on Hold - When the Registry receives a transaction, such as a registration or transfer, that is missing information or has a shortage of payment, the work is considered an “Item on Hold.” The payment received is deposited but recorded as a liability. The liability is reduced and revenue is recognized once all of the paperwork and payment is submitted and the work is completed. As of November 30, 2011, the balance in this “Item on Hold” liability account was $93,942.



4.While it is doubtful that all those customers with incomplete transactions would cancel their transactions and request refunds all at once, due care and caution should be exercised to hold these incomplete transactions to a minimum.



5.  Time - After multiple years of continued downturns in the industry, in the economy, and after so many cuts previously made; it becomes more and more difficult to make further cost cuts.


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