Olms interpretative Manual

CONTENTS OF ANNUAL REPORT:ASSETS

214.201LMRDA,SECTION201(b)(1)

...assetsandliabilitiesatthebeginningandendofthefiscalyear;...

214.205

See Instructions for LM-2, Items 15, 16, 22-29. (For examples of assets).SeeInstructions for LM-3, Items 13, 25-31.

214.210 CLAIMS IN LITIGATION

“GrainWarehousemen’sLocalNo.X,”affiliatedwithInternationalUnionY,isinducedby

International Union Z to disaffiliate from International Union Y and to affiliate with it (Z).Oneof X’s assets was a $6,000 bond on deposit with International Y.Y refuses to turn over the bondand as part of the “affiliation” with Z, International Union Z takes an assignment of X’s claimand pays X the full $6,000.It is expected that Z will be able to recover the bond but in any eventthe officers of Z feel it a worthwhile expenditure for securing a going local, X, and ifunsuccessfulare prepared totreatthe $6,000asan organizingexpense.

The proper reporting by the International of the claim for the bond which they (Z) have takenfrom Local X is “Other Assets,” reportable in Item 28 of the LM-2. The amount of thiscontingent claim should be set forth in the supporting schedule for “Other Assets” (LM-2,Schedule7)andfulldetailsshouldbefurnishedin Item69-- AdditionalInformation.

(TechnicalRevisions:Dec.2016)

214.215YEARLYGROWTHINU.S.TREASURYBONDS

Yearly growthinU.S.TreasuryBondscanbeshownonFormLM-2ineitheroftwoways.If the bond is carried on the books at cost, actual cost is entered in Item 25, Columns A and B.When the bond is converted into cash, total redemption price is entered in Item 43 (andsupporting Schedule 3). Alternately, if the bond is carried on the books at current appreciatedvalue, rather than cost, the yearly growth would be shown by entering that increased value at theend of the reporting period in Item 25, Column B, and entering the cost of the bond in Item 69withabriefexplanationofthenoncashincreaseinvalue.

(TechnicalRevisions:Dec. 2016)

214.220DEPRECIATINGANDEXPENSINGFIXEDASSETS

Land and buildings must be itemized, whereas automobiles and other vehicles, and officefurniture and equipment should be aggregated.A labor union is required to record the purchaseof fixed assets as assets in its financial records and to charge a portion of the cost of those itemsin each year in which they have a useful life (i.e., depreciate).To expense a fixed asset is tocharge the cost of the asset to current expenses, rather than enter the asset on the books andperiodically depreciate it.It is generally not permissible to expense certain fixed assets, such asbuildings, office furniture and equipment (e.g., computers, photocopiers), and automobiles.If itis permissible under accounting procedures and tax law to expense a fixed asset, and the uniondoes so in its books, then the union may report the fixed assets in this manner on the Form LM-2.All fixed assets, other than land, must be reported in Form LM-2, Column C with accumulateddepreciation or an amount expensed.Fixed assets must be reported even when expensed, fullydepreciated,orcarriedonthebooksatscrapvalueorothernominalvalue.

(Revised:Dec.2016)