[icann-eu] Re: HOWCANN YOU LOSE VERIFICATION 1.3 MIL?

[Mike Roberts <mmr@darwin.ptvy.ca.us>]

At 14:05 -0700 5/3/01, Eric Dierker wrote:
>
>  > THIS HERE IS A CUT OUT OF ICANN'S OFFICIAL INDEPENDENT AUDIT AT;
>>  http://www.icann.org/financials/financial-report-fye-30jun00-letter.htm
>>
>>  <<    We were unable to obtain sufficient verifiable evidence supporting
>>  certain Country Code Top Level Domain (ccTLD) accounts receivable
>>  totaling $1,355,000 at June 30, 2000 or the related registry fee
>>  revenue, which is included in the change in net assets for the year then
>>  ended as described in note 2 to the financial statements; nor were we
>>  able to satisfy ourselves as to the adequacy of the allowance for
>>  doubtful accounts related to these receivables.
>>
>>      In our opinion, except for the effects of such adjustments, if any,
>>  as might have been determined to be necessary had we been able to
>>  examine verifiable supporting evidence regarding the accounts
>>  receivable, allowance for doubtful accounts and related registry fees,
>>  as discussed in the third paragraph of this report, the financial
>>  statements referred to in the first paragraph above present fairly, in
>>  all material respects, the financial position of Internet Corporation
>>  for Assigned Names and Numbers as of June 30, 2000 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.>>
>>
>>  Now I just want one or two of you to march right into your tax office
>>  and explain that you do not have the documents for, oh say roughly, a
>>  third of your income so you ain't gonna pay on it because you should be
>>  a non-profit.  And these guys want to suspend voting rights for a
>>  constituency that has not paid 15 grand.

The extract above should be read in conjunction with footnotes 2 and 
3 to the audit report which appear later in the same document and are 
shown below.  The issue with the auditors was whether a receivable 
entry was appropriate in the absence of a signed agreement with the 
registry.  The outcome of the dialog among ICANN's auditors, Audit 
Committee, accountants, and staff was that it would be used for last 
year's report, but that the related procedures would be revised for 
subsequent fiscal years, as they have been.

Payments after June 30th of last year have reduced the receivable 
from $1.355 million to approximately $500,000.

None of this has anything to do with tax exempt status.

- Mike

----------

"(2) Summary of Significant Accounting Policies

(c) Reporting

The accompanying financial statements include certain ccTLD accounts 
receivable and related registry fee  revenue. As of and for the year 
ended June 30, 2000, accounts receivable and ccTLD registry fees have 
been increased $1,355,000 by the inclusion of these receivables based 
solely on oral agreements  between ICANN and the participating 
countries. Such receivables and revenues are not supported by written 
agreements nor has any allowance for doubtful accounts been 
established relating to the receivables (see note 3).

(3) Accounts Receivable

            Accounts receivable totaling $2,552,000 at June 30, 2000 
includes amounts receivable from ccTLDs, gTLDs and IP address 
registries of $1,355,000, $769,000 and $428,000, respectively, for 
various registry and accreditation fees. Receivables from ccTLDs at 
June 30, 2000 include amounts receivable from the following countries:

                              Germany
 
$ 483,000
                              United Kingdom
 
249,700
                              Argentina
 
49,400
                              Denmark
 
48,300
                              Republic of Korea
 
46,000
                              Australia
 
40,100
                              Switzerland
 
35,400
                              Italy
 
32,400
                              Netherlands
 
31,600
                              Canada
 
23,200
                              Other countries
 
315,900

 
$ 1,355,000"