GORANSON AND ASSOCIATES, INC.
G
AMAZON WATCH
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
DECEMBER 31, 2013
TABLE OF CONTENTS
Page
Independent Auditor’s Report 1 - 2
Financial Statements:
Statement of Financial Position 3
Statement of Activities 4
Statement of Functional Expenses 5
Statement of Cash Flows 6
Notes to Financial Statements 7 - 12
GORANSON AND ASSOCIATES, INC.
446 BEAVER STREET, SANTA ROSA, CA 95404 PHONE: 707/542-1256 FAX: 707/575-0609 GORANSONCPA.COM
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INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
Amazon Watch
Oakland, California
We have audited the accompanying statement of financial position of Amazon Watch (a California
nonprofit public benefit corporation) as of December 31, 2013, and the related statement of
activities, functional expenses, and cash flows for the year then ended, and the related notes to the
financial statements. Our responsibility is to express an opinion on these financial statements
based on our audit. The prior year summarized comparative information has been derived from
Amazon Watch’s 2012 financial statements and, in our report dated August 15, 2013; we expressed
an unqualified opinion on those 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 accounting principles generally accepted in the United States of America; 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 audit. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of 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 risks of material 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 auditor 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 of significant accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
GORANSON AND ASSOCIATES, INC.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Amazon Watch as of December 31, 2013, and the changes in its net assets and
its cash flows for the year then ended in conformity with accounting principles generally accepted
in the United States of America.
Goranson and Associates, Inc.
September 5, 2014
Santa Rosa, California
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AMAZON WATCH
STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2013
(With summarized comparative totals for December 31, 2012)
2013 2012
ASSETS
Current assets:
Cash and cash equivalents 342,611$ 79,271$
Grants receivable 212,566 171,296
Prepaid expense
- 1,089
Total current assets
555,177 251,656
Fixed assets:
Equipment 60,782 60,782
Less accumulated depreciation
(59,066) (55,119)
Total fixed assets
1,716 5,663
Other assets:
Investments
11,579 19,519
Total assets
568,472$ 276,838$
LIABILITIES AND NET ASSETS
Current liabilities:
Accounts payable and credit cards 27,172$ 22,954$
Vacation and wages payable
29,522 -
56,694 22,954
Net Assets:
Unrestricted 91,925 (7,530)
Temporarily restricted
419,853 261,414
Total net assets
511,778 253,884
Total liabilities and net assets
568,472$ 276,838$
The accompanying notes are an integral part of these financial statements
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AMAZON WATCH
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2013
(With summarized comparative totals for the year ended December 31, 2012)
Temporarily 2013 2012
Unrestricted Restricted Total Total
SUPPORT AND REVENUE:
Grants and contributions 1,037,872$ 670,793$ 1,708,665$ 1,477,560$
Unrealized Gain (loss) 1,108 - 1,108 (1,108)
Other income 2,404 - 2,404 8,716
512,354 (512,354) - -
Total support and revenue
1,553,738 158,439 1,712,177 1,485,168
EXPENSES:
Campaigns and capacity building
grants to partners 1,151,945 1,151,945 1,478,280
Management and general 110,081 110,081 112,120
Fund development
192,258 192,258 251,464
Total expenses
1,454,284 1,454,284 1,841,864
CHANGE IN NET ASSETS 99,455 158,439 257,893 (356,695)
NET ASSETS, BEGINNING
(7,530) 261,414 253,884 610,579
NET ASSETS, ENDING
91,925$ 419,853$ 511,777$ 253,884$
The accompanying notes are an integral part of these financial statements
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AMAZON WATCH
STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2013
(With summarized comparative totals for the year ended December 31, 2012)
Campaigns
and Grants to 2013 2012
Partners Administration Fundraising Total Total
Salaries and wages 553,914$ 30,947$ 113,277$ 698,138$ 617,565$
Payroll tax expense 44,551 2,530 9,167 56,248 54,021
Employee benefits 57,378 3,260 11,840 72,478 72,347
Grants awarded 176,354 - 174 176,528 296,258
Travel 67,720 2,076 4,870 74,666 177,902
Professional services 92,051 42,279 14,489 148,819 301,803
Occupancy 57,432 10,583 68,015 92,070
Fundraising 325 - 13,928 14,253 34,522
Publicity 21,151 1,313 461 22,925 90,984
Conferences and meetings 3,916 3,219 165 7,300 6,150
Telecommunications 21,246 3,525 1,956 26,727 18,898
Insurance 15,361 2,862 1,104 19,327 7,664
Finance charges 14,998 2,319 7,068 24,385 16,672
Supplies and equipment 5,853 659 968 7,480 14,991
Postage 438 - 1,786 2,224 4,017
Outside services 3,813 828 394 5,035 3,732
Printing and copying 7,053 1,065 7,894 16,012 13,855
Other operating expense
5,208 2,095 2,474 9,777 13,251
Subtotal 1,148,762 109,560 192,015 1,450,337 1,836,702
Depreciation
3,183 521 243 3,947 5,162
Total expenses
1,151,945$ 110,081$ 192,258$ 1,454,284$ 1,841,864$
The accompanying notes are an integral part of these financial statements
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AMAZON WATCH
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2013
(With summarized comparative totals for the year ended December 31, 2012)
2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Change in net assets 257,893$ (356,695)$
Adjustments to reconcile change in net
assets to cash from operations
Depreciation 3,947 5,162
Unrealized gains 1,108 1,108
(Increase) decrease in:
Grants receivable (41,270) 362,940
Prepaid expenses 1,089 -
Increase (decrease) in:
Accounts payable 4,219 3,642
Vacation and wages payble
29,522 -
Net cash provided by operating activities
226,986 16,157
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in investments 6,832 (1,695)
Purchase of property and equipment
- -
Net cash provided (used) by investing activities
6,832 (1,695)
CASH FLOWS FROM FINANCING ACTIVITIES:
Draw on line of credit
- (50,303)
NET DECREASE IN CASH 263,340 (35,841)
CASH, beginning of year
79,271 115,112
CASH, end of year
342,611$ 79,271$
The accompanying notes are an integral part of these financial statements
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AMAZON WATCH
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 1 ORGANIZATION
Amazon Watch was created in 1997 as a Montana nonprofit corporation and incorporated in the
state of California April 2000. Amazon Watch works to protect the rainforest and advance the rights
of indigenous peoples in the Amazon Basin. We partner with indigenous and environmental
organizations in the Amazon in campaigns for corporate accountability, sustainability, human
rights, and the protection of ecological systems. Primary support comes from private funding.
Our Strategies and Programs:
In the Amazon region of Brazil, Colombia, Ecuador, and Peru, Amazon Watch is working directly
with indigenous communities to build local capacity and advance the long-term protection of their
lands. In partnership with communities, non-governmental organizations, concerned shareholders
and citizens, we utilize the following strategies:
Campaign to persuade decision-makers in corporations, international financial institutions and
governments to honor the rights of indigenous peoples over “development” decisions in their
territories and to rectify past harms, for example in areas devastated by past and current oil
drilling. Through media exposure, legal action and shareholder campaigns we promote corporate
social and environmental accountability.
Strengthen capacity in indigenous communities and partner organizations in the Amazon to better
advocate for own their rights at local, national and international forums. Through training in legal
rights, advocacy, media and technology as well as the donation of equipment, we help our
indigenous partners protect their rainforest homelands, assert their collective voice and advance
their rights.
Seek permanent protection for threatened areas and vulnerable indigenous populations in the
Amazon rainforest. In partnership with ally organizations in South America, we champion
ecologically sound alternatives and solutions to industrial and fossil-fuel intensive economic
development.
Educate corporate executives, shareholders, public officials and the general public using media
coverage, websites, publications and documentary films. By building awareness and promoting
green economic alternatives to the current export-oriented development model, we are helping to
bring about a shift within key institutions and society.
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AMAZON WATCH
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation – Amazon Watch reports information regarding its financial position and
activities on an accrual basis according to three classes of net assets: unrestricted, temporarily
restricted, and permanently restricted.
Unrestricted Net Assets
– Net assets that are not subject to donor-imposed restrictions. These
also may be designated for specific purposes by action of the Board of Directors.
Temporarily Restricted Net Assets
– Net assets that are subject to donor-imposed stipulations
that may be fulfilled by actions of Amazon Watch to meet the stipulations or that become
unrestricted at the date specified by the donor.
Permanently Restricted Net Assets
– Net assets subject to donor-imposed stipulations that they
be retained and invested permanently by Amazon Watch to use all or part of the investment
return on these net assets for specified or unspecified purposes.
Net assets released from restriction – Temporarily restricted net assets are “released” to
unrestricted net assets when the donor-stipulated purpose has been fulfilled and/or the stipulated
time period has elapsed.
Other Basis of Presentation Policies – Revenues or support are reported as increases in
unrestricted net assets unless subject to donor-imposed restrictions. If temporary restrictions are
fulfilled in the same time period the revenue or support is received, Amazon Watch reports the
revenue or support as unrestricted. Expenses are reported as decreases in unrestricted net assets.
Gains and losses on investments and other assets or liabilities are reported as increases or
decreases in unrestricted net assets unless restricted by explicit donor stipulation or by law.
Cash and Cash Equivalents - Cash equivalents consist primarily of money market accounts and
other investments with an original maturity of 90 days or less.
Grants Receivable - Grants receivable consist of grants awarded, but not yet received as of
December 31, 2013. Management believes receivables at December 31, 2013 will be fully
collected. Accordingly, no allowance for doubtful receivables is recorded.
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AMAZON WATCH
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Fixed Assets - Fixed assets are carried at cost or at estimated fair market value at date of donation.
Depreciation is calculated using the straight-line method over the useful life of the asset, usually
five to ten years depending upon the asset.
Investments- Investments are stated at fair value. Unrealized and realized gains and losses are
reported on the statement of activities. Interest income is included as an increase in unrestricted
net assets in the accompanying statement of activities as its use is unrestricted.
Income Taxes - Amazon Watch is exempt from Federal and State Income taxes under Internal
Revenue Code Section 501(c)(3) and California Franchise Tax Board Code Section 23701d.
Therefore, no provision for income taxes has been made in the accompanying financial
statements. In addition, the Internal Revenue Service has determined Amazon Watch is not a
“private foundation” within the meaning of Section 509(a) of the Internal Revenue Code.
Management of Amazon Watch considers the likelihood of changes by taxing authorities in its filed
tax returns and recognizes a liability for or discloses potential significant changes if management
believes it is more likely than not for a change to occur, including changes to Amazon Watch’s
status as a not-for-profit entity. Management believes Amazon Watch met the requirements to
maintain its tax-exempt status and has not income subject to unrelated business income tax;
therefore no provision for income taxes has been provided in these financial statements. Amazon
Watch’s tax returns for the past three years are subject to examination by tax authorities, and may
change upon examination.
Donated Services and Items - Many people have contributed significant amounts of time and
inventory to the activities of Amazon Watch without compensation. The financial statements do not
reflect the value of those contributed services because, although clearly substantial, detailed
information is not maintained to determine an appropriate basis for valuation.
Estimates - The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual results could differ from these
estimates.
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AMAZON WATCH
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Summarized Financial Information – The financial statements include certain prior year
summarized comparative information in total but not by net asset class. Such information does
not include sufficient detail to constitute a presentation in conformity with accounting principles
generally accepted in the United States of America. Accordingly such information should be read
in conjunction with Amazon Watch’s financial statements for the year ended December 31, 2012,
from which the summarized information was derived.
NOTE 3 GRANTS RECEIVABLE
Grants receivable consist of the following at December 31, 2013:
Campaigns support 102,383$
General program support 110,183
212,566$
NOTE 4 FAIR VALUE MEASUREMENTS AND INVESTMENTS
Fair Value Measurements - Generally accepted accounting principles provide guidance on how fair
value should be determined when financial statement elements are required to be measured at fair
value. Valuation techniques are ranked in three levels depending on the degree of objectivity of the
inputs used with each level:
Level 1 Inputs
– quoted prices in active markets for identical assets
Level 2 Inputs
– quotes prices in active or inactive markets for the same or similar assets
Level 3 Inputs
– estimates using the best information available when there is little or no market
The following table sets forth, by level within the fair value hierarchy, the Agency’s assets measured
at fair value on a recurring basis at December 31, 2013.
Level 1
Common stock $ 11,579
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AMAZON WATCH
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 5 REVOLVING LINE OF CREDIT
Amazon Watch has a $100,000 revolving line of credit secured by the assets of the organization
renewed August 20, 2013. Bank advances on the credit line are payable on demand and carry
an interest rate of 3.25 percent above the prime rate, with a 7.5 percent floor. There is no
balance carried at December 31, 2013.
NOTE 6 TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted net assets are monies awarded with either program or time restrictions for
future or multi-year programs. Temporarily restricted net assets at December 31, 2013 are for the
following purposes:
Re-granting 132,253$
Peru 14,000
Ecuador 82,500
Brazil 20,000
General support 38,000
Campaigns support 133,100
419,853$
NOTE 7 LEASE COMMITMENTS
Amazon Watch leases its offices in Oakland under a five year lease dated January 1, 2013 and
expiring December 31, 2017. Amazon Watch also leases office space in Washington D.C. on a
month-to-month basis. Total rent expense for the year ended December 31, 2013 is $68,015.
Future lease payments are as follows on December 31:
2014 $ 93,756
2015 104,288
2016 107,417
2017 110,639
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AMAZON WATCH
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2013
NOTE 8 RETIREMENT PLAN
Amazon Watch provides a SIMPLE IRA plan qualified under Section 408(p) of the Internal Revenue
Code (IRS). Employees may make contributions to the plan up to the maximum amount allowed
by the IRS if they wish. Amazon Watch contributed $5,863 in matching funds, as required by the
plan for the year ended December 31, 2013.
NOTE 9 SUBSEQUENT EVENTS
Amazon Watch has evaluated subsequent events through September 5, 2014, which is the date the
financial statements were available to be issued, and determined that there were no events
occurring subsequent to December 31, 2013.