An interesting quandry. Here is an extract from the statement that
accompanies the Statement of Financial Position for The Metropolitan Museum
of Art, taken verbatim from the 1998-1999 Annual Report (a public document):

""The collections are maintained for public exhibition, education, and
research in furtherance of public service, rather than financial gain. In
conformity with accounting policies generally followed by art museums, the
value of the Museum's collections has been excluded from the Statement of
Financial Position, and gifts of art objects are excluded from revenue in
the Statement of Activities. Purchases of art objects by the Museum are
recorded as decreases in net assets in the Statement of Activities."

If you haven't already tried it, I would certainly pursue the argument that
unless the Financial Committee is planning to sell off the collection to
support the operation of the institution, it should not be listing them as
assets (as Harold Needham alluded to in his response to your post). The
dictionary definition of an asset includes "a valuable item that is owned"
and "the entire property owned... esp. that which can be used to settle
debts." The institution holds the collections in trust for the public, as
part of the very definition of being a not-for-profit under US tax law.
Listing them as assets could potentially (you could argue) jeapordize NFP
status, as well as violate the institution's charter/mission (if it does in
fact do so) by implying the collections are disposable assets.

Well, you get the idea. Let us all know on-list what transpires... and good
luck!


Dennis Kois
Design Department
The Metropolitan Museum of Art

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