THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIACONTENTSINDEPENDENT AUDITOR'S REPORT

1

FINANCIAL STATEMENTS
Statements of Financial Position

2Statements of Activities

3

Statements of Functional Expenses

4

Statements of Cash Flows5

Notes to Financial Statements

6

INDEPENDENT AUDITOR'S REPORTBoard of Directors
The Friends of the Japanese House and Garden
d/b/a Japan America Society of Greater Philadelphia
Philadelphia, Pennsylvania

We have audited the accompanying financial statements of The Friends of the Japanese House and Garden, d/b/a
Japan America Society of Greater Philadelphia (a nonprofit organization), which comprise the statements of financial
position as of December 31, 2019 and 2018, and the related statements of activities, functional expenses and cash
flows for the years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal
control relevant to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our
audits in accordance with U.S. generally accepted auditing standards. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects, the financial positionof The Friends of the Japanese House and Garden, d/b/a Japan America Society of Greater Philadelphia as ofDecember 31, 2019 and 2018, and the changes in its net assets and its cash flows for the years then ended inaccordance with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania
July 24, 2020

THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIASTATEMENTS OF FINANCIAL POSITION
December 31, 2019 and 20182019
ASSETS
Cash
Accounts receivable
Contributions
Other
Inventory
Prepaid expenses and other assets
Property and equipment, net
Collections$

Total assets

LIABILITIESLine of credit
Accounts payable and accrued expenses
Deferred revenue
Refundable advances

75,2442018$

42,093

178,361
3,007
32,9562,519-

471,316
13,345
2,058
21,966
4,065-$ 292,087$ 554,843$$

59,4801,800
129,600

30,00042,700-Total liabilities

190,880

72,700

NET ASSETS (DEFICIT)
Without donor restrictions
With donor restrictions(327,065)
428,272(206,569)
688,712

Total net assets

101,207482,143$ 292,087$ 554,843

Total liabilities and net assets

See accompanying notes-2-THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIASTATEMENTS OF ACTIVITIESYears ended December 31, 2019 and 20182019
Without Donor
Restrictions
REVENUE AND SUPPORTContributions
Government grants
Membership dues
Admission fees
Gift shop sales
Miscellaneous income
Gain on foreign currency translation
Net assets released from restrictions-3-

Total revenue and support
EXPENSES
ProgramManagement and generalFundraising
Total expenses
Change in net assets before other changes
OTHER CHANGES
Loss on uncollectible contribution receivable
CHANGE IN NET ASSETSNET ASSETS (DEFICIT)
Beginning of year
End of year
See accompanying notes$

186,883
8,269
29,476479,490
21,2003,445
119297,525

2018

With Donor
Restrictions$

97,085(297,525)

Total$

283,968
8,269
29,476479,490
21,2003,445
119-

Without Donor
Restrictions$

With Donor
Restrictions

210,482
14,29437,746432,696
24,203526
305,559$ 468,593(305,559)

Total$

679,075
14,29437,746432,696
24,203526-

1,026,407(200,440)

825,967

1,025,506

163,034

1,188,540

818,814
188,003
140,086-

818,814
188,003
140,086

772,684
198,923
111,896-772,684
198,923
111,896

1,146,903-

1,146,903

1,083,503-

1,083,503(120,496)(200,440)(320,936)(57,997)

163,034

105,037-(60,000)(60,000)---(120,496)(260,440)(380,936)(57,997)

163,034

105,037(206,569)

688,712482,143(148,572)

525,678

377,106$ (327,065)$ 428,272

101,207$ (206,569)$ 688,712$$

482,143

THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIASTATEMENTS OF FUNCTIONAL EXPENSES
Years ended December 31, 2019 and 2018

Program
Salaries
Payroll taxes
Employee benefits
Total payroll and related expenses-4-

Advertising, marketing and public relations
Artists and performance fees
Catering and hospitality
Conferences and professional development
Credit card and bank fees
Depreciation
Dues and subscriptions
House and garden repairs and maintenanceInsurance
Miscellaneous
Office expenses
Office rent
Printing and postage
Professional fees and consultants
Program expenses
Restoration expenses
Telephone and communications
TravelTotal expenses

See accompanying notes

2019Management
and General Fundraising$

2018Management
and General Fundraising

Total

Program

564,050
46,39757,399$ 351,115
29,45437,446$ 80,898
6,786
8,628

$ 75,819
6,360
8,086

Total

$ 384,231
31,606
39,100$ 82,633
6,797
8,409

$ 97,186
7,994
9,890

$

507,832
42,60054,160454,937

97,839115,070

667,846

418,015

96,31290,265604,592

37,483
4,456
4,598
7,733
948
31
15,8459,770
2,045
34,041
3,879
53,063
164,408
1,165
12,90011,512

616
20
1,367
21,741
204
7,511
2,861
5,163
2,263
11,872
7,311
1,182
23,104
300
2,774
1,875

521
508
1,588
240
67
1,322
1,206
8,598
6,090
652
410
3,263
551

38,6204,456
5,126
10,68821,741
1,392
7,609
18,706
16,255
2,263
15,123
49,950
11,151
76,819165,118
1,165
18,937
13,93830,004
13,688
2,434
4,402
1,841
2,050
13,75912,491
6,824
46,0988,490
60,588126,193
8,004
12,778
5,025

6,915
158
3,883
19,352
424
4,419
6,686
3,830
9,828
10,621
6,000
20,942
36
2,944
6,573

965
150
397
1,002
218
9,954
3,394
640
2,152
2,759
-

36,91913,6883,557
8,435
19,352
2,662
6,469
13,75920,1793,830
16,87066,673
17,884
82,170128,381
8,004
18,481
11,598$ 818,814$ 188,003$ 140,086$ 1,146,903$ 772,684$ 198,923$ 111,896$ 1,083,503

THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIASTATEMENTS OF CASH FLOWS
Years ended December 31, 2019 and 2018
2019

2018

$ (380,936)$ 105,037

Loss on uncollectible accounts receivable
Loss on disposal of property and equipment
Depreciation

60,000
154
1,392

2,662

(Increase) decrease in
Accounts receivable
Inventory
Prepaid expenses and other assets

246,300(949)(10,990)(99,693)919(3,588)

Increase (decrease) in
Accounts payable and accrued expenses
Deferred revenue
Refundable advances

16,7801,800
129,600(78,996)-

Net cash provided by (used for) operating activities

63,151(73,659)(30,000)

30,00033,151(43,659)

42,09385,752$75,244$ 42,093

$

2,013

$

CASH FLOWS FROM OPERATING ACTIVITIES
Change in net assets
Adjustments to reconcile change in net assets to
net cash provided by (used for) operating activities

CASH FLOWS FROM FINANCING ACTIVITIESNet advances (repayments) on line of credit
Net change in cash
CASH
Beginning of year
End of year

SUPPLEMENTAL DISCLOSURE
Interest paid

See accompanying notes
-5-

3,525

THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIANOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018
(1) NATURE OF ORGANIZATIONThe Friends of the Japanese House and Garden ("FJHG"), doing business as Japan America Society ofGreater Philadelphia ("JASGP") (the "Organization") is a private nonprofit organization in Philadelphia, PA
that resulted from the July 2016 merger of FJHG, founded in 1982, and JASGP, founded in 1994 with a new
mission to inspire mutual curiosity, understanding, and collaboration between Japan and the Philadelphia
region.
JASGP’s overarching goal is to serve the people of Philadelphia by making Greater Philadelphia a nationallyand globally known center of Japanese art, business, and culture, with the historic Shofuso Japanese Houseand Garden as its centerpiece. JASGP is an out-sized contributor to the fabric of Philadelphia’s art, business,and cultural worlds and served over 65,000 stakeholders in 2019.
Shofuso Japanese House and Garden, the third-ranked Japanese garden in North America, is JASGP’s largest
program. JASGP preserves, maintains, presents, and interprets Shofuso on behalf of the City of Philadelphia.
Shofuso is a dynamic and unique historic site with over 35,000 visitors each year. The Subaru Cherry Blossom
Festival, the most authentic large cherry blossom festival in North America, is the next largest program, which
serves over 30,000 additional people each year. JASGP also conducts Japanese arts, business, and cultural
programming for all ages year-round.
In addition, JASGP is the fiscal sponsor for KyoDaiko community taiko drumming group, which provides
lessons for over 100 people each year and performs more than 15 times each year for audiences totaling in thetens of thousands, in addition to JASGP’s stakeholder count. This agreement terminated effective December
31, 2019.
2019 was a year of preparation for our ambitious JapanPhilly2020 year of art, business, and cultural
programming connecting Japan and Philadelphia. We incurred many expenses in preparation for this big yearof programming planned for 2020, with partners across the region and back to Japan. Expenditures in 2020 for
this project, which is the culminating activity of our three year 2018-2020 strategic plan, include the wages of aJapanPhilly2020 project manager, a trip to Japan to secure corporate sponsors and cultural partners, advancepublic relations preparation, domestic travel to secure corporate sponsors and cultural partners, and planningfor our groundbreaking exhibitions in 2020 of Shofuso and "Modernism: Midcentury Collaboration Between
Japan and Philadelphia", funded by a $324,000 grant from a major private foundation. We hired a corporate
relations manager to increase our corporate financial support and to produce the US-Japan Business & Public
Policy program to engage our corporate members. We exceeded 400 individual members in 2019, a new high.
We served almost 70,000 stakeholders through all of our programming in 2019, the most ever. We continued to
be professional leaders in our fields through leadership in the National Association of Japan America Societies(NAJAS), the North American Japanese Garden Association (NAJGA), and Greater Philadelphia
Gardens/America's Garden Capital.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of Accounting
The financial statements have been prepared on the accrual basis of accounting. Accordingly, revenues arerecognized when earned and expenses are recognized when incurred.

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THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIANOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018
Basis of Presentation
The Organization reports information regarding its financial position and activities according to the followingclasses of net assets:
Without donor restrictions
Net assets that are not subject to donor-imposed restrictions.
With donor restrictions
Net assets that are subject to donor-imposed restrictions that will be satisfied by actions of theOrganization and/or the passage of time. When a restriction is satisfied, net assets with donor
restrictions are reclassified to net assets without donor restrictions and reported in the statement ofactivities as "net assets released from restrictions".
This category also includes net assets that are subject to donor-imposed restrictions that neither expire
by passage of time nor can be satisfied by actions of the Organization.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements. Those estimates andassumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets andliabilities, and the reported revenues and expenses. Actual results could differ from those estimates.
Concentration of Credit Risk
Cash and accounts receivable represent financial instruments that potentially subject the Organization toconcentration of credit risk. The Organization maintains its cash at high-quality financial institutions. At
times, such deposits may exceed federally-insured limits. The Organization has not experienced any losses
on its deposits.
Contributions receivable are expected to be collected as disclosed in Note 3.
Fair Value Measurements of Assets and Liabilities
Accounting principles generally accepted in the United States of America ("GAAP") define fair value as theprice that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. GAAP establishes a fair value hierarchy for inputs used inmeasuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable
inputs by requiring that the most observable inputs be used when available. Observable inputs are thosethat market participants would use in pricing the asset or liability based on market data obtained fromsources independent of the Organization. Unobservable inputs reflect the Organization's assumptions
about the inputs market participants would use in pricing the asset or liability based on the best information
available in the circumstances. The fair value hierarchies are categorized into three levels based on the
inputs as follows:
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that theOrganization has the ability to access. Since valuations are based on quoted prices that are readily andregularly available in an active market, valuation of these assets and liabilities does not entail a significant
degree of judgment.
Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs
are observable, either directly or indirectly.
Level 3 – Valuations based on inputs that are unobservable, that is, inputs that reflect the Organization's
own assumptions.

-7-THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIANOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018
Cash
Cash includes checking accounts, a money market account, a petty cash fund and a foreign currency
account. The foreign currency account is held in Japanese Yen and is translated into U.S. Dollars based
upon the exchange rate on December 31, 2019. The transactions in the account are translated into U.S.
Dollars based upon the exchange rate on the date of the transactions.
Accounts Receivable
Accounts receivable are stated at the amount management expects to collect from outstanding balances.
Management provides for probable uncollectible amounts through a charge to earnings and a credit to avaluation allowance based on its assessment of the current status of individual accounts. Balances that are
still outstanding after management has used reasonable collection efforts are written off through a charge tothe valuation allowance and a credit to accounts receivable. There was no valuation allowance necessary
at December 31, 2019 and 2018.
Inventory
Inventory consists of merchandise in the gift shop and is recorded at the lower of cost or market.
Property and Equipment
Purchased property and equipment are recorded at cost. Donated property and equipment are recorded attheir estimated fair value at the time of donation. Depreciation is computed using the straight-line method
over the estimated useful lives of the assets. Maintenance and repairs are expensed as incurred.
Collections
The collections of the Organization have been acquired through contributions. The collection items arecomprised of objects, art and textiles that contribute to interpreting Shofuso and Japanese culture. The
items are categorized, preserved and cared for in compliance with a collection policy. The collection items
are not recognized as assets on the statement of financial position and contributions of collection items are
not recognized as support on the statements of activities.
Contributions and Government Grants
Contributions and government grants received are recorded as net assets without donor restrictions or withdonor restrictions depending on the absence or existence and nature of any donor restrictions. Donorrestricted contributions and government grants whose restrictions are satisfied in the same period are reported
as net assets without donor restrictions.
Unconditional contributions and government grants are recognized as revenue in the period the related
promise to give is received. Conditional contributions and government grants are recognized when theconditions are satisfied. Accordingly, amounts received in advance of the conditions being satisfied areincluded in refundable advances in the accompanying statements of financial position.
During 2018, the Organization received contributions of $300,000 from a single foundation.
Contributed Services
GAAP requires that contributed services be recognized as contributions if the services either create orenhance non-financial assets or require specialized skills, are provided by entities or persons who possess
those skills and would be purchased if they were not donated. The Organization received contributed
services of $31,139 in 2019 and $31,097 in 2018 from the City of Philadelphia for program workers.

-8-THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIANOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018
The Organization also receives significant amounts of time from individuals who perform various functions
for the Organization without compensation. The financial statements do not reflect the value of thesecontributed services since the services do not meet the criteria for recognition.
Revenue
Membership dues are recorded as revenue in the year to which they relate. Revenue from admissions andprograms is recorded on the day of admission or program. Accordingly, revenue from these sources
received in advance of the applicable year is included in deferred revenue in the accompanying statementsof financial position and is recognized as revenue in the immediate subsequent year.
Advertising Costs
Advertising costs are expensed as incurred. Advertising expense was $19,620 in 2019 and $18,919 in
2018.
Functional Allocation of Expenses
The costs of providing various program and supporting services have been presented on a functional basis
in the statements of activities and functional expenses. Expenses directly attributable to a specific functional
area are reported as expenses of that functional area. Expenses not directly attributable to a specificfunctional area are allocated based upon estimates of time and effort.
Income Tax Status
The Organization qualifies as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue
Code and no provision or liability for income taxes is included in the accompanying financial statements.
GAAP requires entities to evaluate, measure, recognize and disclose any uncertain income tax positions
taken on their tax returns. GAAP prescribes a minimum threshold that a tax position is required to meet inorder to be recognized in the financial statements. The Organization believes that it had no uncertain tax
positions as defined in GAAP.
Accounting Pronouncements Adopted
In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which
outlines a single comprehensive model for entities to use in accounting for revenue arising from contacts
with customers and supersedes most current revenue recognition guidance, including industry-specificguidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. The guidance provides a five-step analysisof transactions to determine when and how revenue is recognized. The guidance also requires enhanced
disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from anentity's contracts with customers. The Organization adopted ASU 2014-09 on January 1, 2019 using themodified retrospective method approach.
The Organization performed an analysis of revenue streams and transactions under ASU 2014-09, including
applying the portfolio approach as a practical expedient to group contracts with similar characteristics suchthat revenue for a given portfolio would not be materially different than if it were evaluated on a contract-bycontract basis. The adoption of ASU 2014-09 had no impact on the amount of revenue recognized sincerevenue continues to be recognized as described above.

-9-THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIANOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018
In June 2018, the FASB issued ASU 2018-08, Not-for-Profit Entities (Topic 958): Clarifying the Scope andthe Accounting Guidance for Contributions Received and Contributions Made. This ASU clarifies andimproves the scope and accounting guidance for contributions received and made and assists entities in
evaluating whether transactions should be accounted for as contributions within the scope of Topic 958,
Not-for-Profit Entities, or as exchange transactions subject to other guidance, and in determining whether acontribution is conditional. The Organization adopted ASU 2018-08 on January 1, 2019.
Reclassifications
Certain reclassifications have been made to the 2018 financial statements to conform to the presentation in
the 2019 financial statements.

(3) CONTRIBUTIONS RECEIVABLE
The contributions receivable at December 31, 2019 and 2018, which were valued using level 2 inputs, areexpected to be collected as follows:
2019

2018

In less than one year
In one to five years
After five years$151,090
32,179-$286,545
182,180
8,045

Less discount to present value (at 2%)

183,269
2,508

476,770
5,454$180,761$471,316

During 2019, the Organization received a conditional contribution of $324,000 from a private foundation to
support a large-scale exhibition with partner institutions throughout the region and Japan that is expected to becompleted and recognized as revenue in 2020. $129,600 of the contribution was collected during 2019 andhas been recorded as a refundable advance in the accompanying 2019 statement of financial position.

(4)

PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at December 31, 2019 and 2018:

(5)

2019

2018

Computer equipment
Furniture and equipment$ 4,522
15,140$10,364
19,485Less accumulated depreciation

19,662
17,14329,84925,784$ 2,519$ 4,065

LINE OF CREDIT
In March 2018, the Organization obtained a $100,000 bank line of credit. Advances under the credit line arepayable on demand, bear interest at the bank’s prime rate plus 3.00% and are secured by substantially all of
the assets of the Organization. Advances outstanding were $ 0 at December 31, 2019 and $30,000 at
December 31, 2018.

-10-

THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIANOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018(6) NET ASSETS WITH DONOR RESTRICTIONS
Net assets with donor restrictions consisted of the following at December 31, 2019 and 2018:
Balance
December 31, 2018

Balance
Additions Released December 31, 2019

Purpose restrictions
Cherry Blossom Festival and Japan2020

Roof restoration
Garden and landscape restoration
Other$287,948
118,608
15,74933,809$ 61,900
185
15,00020,000$187,948
3,170
33,809$ 161,900
118,793
27,57920,000132,598

100,000$357,525$ 428,272

Time restrictions
Contributions receivable

232,598$688,712
Balance
December 31, 2017

$ 97,085

Balance
Additions Released December 31, 2018

Purpose restrictions
Cherry Blossom Festival
Roof restoration
Garden and landscape restoration
Other$395,000
112,120
5,749
12,809$ 33,408
48,28520,00032,000$140,460
41,797
10,00011,000$287,948
118,608
15,74933,809334,900

102,302

232,598$468,593$305,559$688,712

Time restrictions
Contributions receivable$525,678(7) COMMITMENTS
The Organization has a lease with the City of Philadelphia through the Fairmount Park Commission for theJapanese House and Garden to be used and occupied as a historical museum. The lease began in 1984 andis renewable annually at $1 per year.
The Organization has a second lease with the City of Philadelphia through the Department of Parks andRecreation for the Sakura Pavilion for the purpose of showcasing the art form and socialization of tea
ceremonies and providing a window into Japanese culture. The lease began in 2012 and is renewable on anannual basis at $1 per year.
The Organization has an agreement with the Commonwealth of Pennsylvania, acting through the Pennsylvania
Historical and Museum Commission, pursuant to which it is responsible for the maintenance, preservation andadministration of the property known as Shofuso Japanese House and Garden, for a period of fifteen years
from December 2017 to December 2032.
The Organization leases administrative offices under non-cancelable leases expiring at various dates throughJanuary 2022. Rent expense was $49,950 for 2019 and $66,673 for 2018.
The future minimum lease obligations under these leases are $35,345 for 2020, $36,078 for 2021 and $3,012
for 2022.

-11-

THE FRIENDS OF THE JAPANESE HOUSE AND GARDEN
D/B/A JAPAN AMERICA SOCIETY OF GREATER PHILADELPHIANOTES TO FINANCIAL STATEMENTS
December 31, 2019 and 2018(8)

LIQUIDITY AND AVAILABILITY OF RESOURCES
The following table reflects the Organization's financial assets as of December 31, 2019 and 2018 and theamounts that are available within one year.
2019
2018
Cash
Accounts receivable
Total financial assets
Less amounts with donor purpose restrictions and time restrictions
beyond one year
Financial assets available within one year

$ 75,244
178,361$ 42,093
484,661

253,605

526,754(328,272)(553,814)$ (74,667)$ (27,060)

As part of the Organization's liquidity management, it has a policy to structure its financial assets to beavailable as its general expenditures, liabilities and other obligations become due. The Organization invests
cash in excess of daily requirements in a money market fund. In order to manage any liquidity deficiencies orunanticipated liquidity needs, the Organization has a committed line of credit in the amount of $100,000.
As described in note 3, during 2019, the Organization received a conditional contribution of $324,000 from a
private foundation to support a large-scale exhibition with partner institutions throughout the region and Japanthat is expected to be completed and recognized as revenue in 2020.
Subsequent to year end, JASGP applied for and received a $127,000 loan under the Paycheck Protection
Program ("PPP") created as part of the relief efforts related to COVID-19 and administered by the Small
Business Administration ("SBA"). The loan accrues interest at 1%, but payments are not required to begin forsix months after the funding of the loan. JASGP is eligible for loan forgiveness of up to 100% of the loan, upon
meeting certain requirements. The loan is uncollateralized and is fully guaranteed by the Federal government.
In addition to the PPP loan, JASGP also received a $110,000 loan under the Economic Injury Disaster Loan
program administered by the SBA. The loan is payable in monthly installments of $470, including interest at
2.75%, from May 2021 through May 2051.
JASGP was one of 317 grant recipients of CARES funding from the National Endowment for the Humanities. In
2020, JASGP received approximately $170,000 in funding to further preserve staff salaries and to fund costassociated with developing virtual tours and online versions of exhibitions and seasonal festivities.
JASGP also received various contributions from its donors and funders related to COVID-19 relief and has
reduced its operating expenses to align more closely with its revenue.

(9)

SUBSEQUENT EVENTSManagement has evaluated subsequent events through July 24, 2020, the date on which the financial
statements were available to be issued. The COVID-19 outbreak in the United States has caused businessdisruption through mandated closings and there is considerable uncertainty around the duration of the closing.
The Organization cancelled its annual Cherry Blossom Festival scheduled for April 2020, which netted over
$89,000 in 2019. However, the duration of the closing and the related financial impact cannot be reasonably
estimated at this time.
Except as disclosed in the previous paragraph and in note 8, no other material subsequent events haveoccurred since December 31, 2019 that require recognition or disclosure in the financial statements.

-12-

2019 Final Audited Financials Addendum

JASGP 2019 loss due to new US accoun ng standards adopted by JASGP auditor a er year end.
JASGP was awarded a $324,000 grant from the Pew Center for Arts & Heritage in 2019, $129,600 ofwhich was collected in December 2019. Prior to 2019 and before the new accoun ng standard ASU
2018-08, it was generally accepted to recognize 100% of this revenue in the year the grant is executed.
JASGP's budget originally accounted for this revenue to ﬂow into our 2019 revenue projec ons.
However, during the audit of our 2019 ﬁnancials, our audi ng ﬁrm, BBD determined that the adop onof ASU 2018-08 categorized Pew's grant as a condi onal grant and removed this revenue from ourStatement of Ac vi es (SOA) and reclassed it as a liability called "refundable advance" on theStatement of Financial Posi on (SFP). As a consequence of this accoun ng standard change, $324K was
removed from our revenue numbers and $129K was added to our liability on the SFP, crea ng a large
nega ve change to net assets. Essen ally, $324K of revenue was moved from 2019's ﬁnancials to2020's ﬁnancials. Please refer to Page 10 of our Audit Report, a ached or see below.
Without this applica on of the new accoun ng standard by our auditor, JASGP’s 2019 deﬁcit would
have been -$56,936. That would have been a less than 5% deﬁcit against expenses, which was originally
expected as we moved into our JapanPhilly2020 year of programming. This programming was
genera ng a large amount of corporate sponsorship that was not closed by year end 2019.
We have received $226,800 of Pew's $324,000 grant to-date and have been spending down on thisamount in 2020. We expect to complete the Pew project by year-end and do not expect to return to
Pew any unspent grant amounts. Addi onally, we maintain a great rela onship and are in compliancewith all repor ng requirements with Pew, receiving $13,500 of addi onal opera onal support fromthem in 2020 in response to the current pandemic.
We received a $127,000 PPP grant and a $119,000 EIDL loan in 2020. We also received numerous Covid-19
relief grants, including a $167,000 NEH CARES grant. We expect to break even opera onally in 2020.
Currently, we are developing a 2021-2023 strategic plan which will priori ze paying oﬀ the EIDL andbuilding an opera ng reserve while working to achieve best prac ces in all areas of our organiza on.
We ask the reader of this audit to consider the unintended impact of implemen ng ASU 2018-08 on
our 2019 ﬁnancials as our auditor interpreted it, speciﬁcally the change in net assets nega vely
impacted by the removal of $324,000 Pew revenue and addi onal liability of $129,600 Pew refundable
advances.
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