MSIC 2022 Annual Report

INANCIAL STATE

MASSACHUSETTS CREDIT UNION SHARE INSURANCE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021

N OTE 2 - S UMMARY OF S IGNIFICANT A CCOUNTING P OLICIES (C ONTINUED ) R EAL E STATE H ELD FOR I NVESTMENT AND P REMISES AND E QUIPMENT , N ET (C ONTINUED ) Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the respective assets or the terms of the lease, if shorter, ranging from three to forty years. Expenditures for improvements which extend the life of an asset are capitalized and depreciated over the asset’s remaining useful life. V ALUATION OF L ONG -L IVED A SSETS Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Assets to be disposed of are reportable at the lower of the carrying amount or fair value, less costs to sell. I NSURANCE A SSESSMENTS During the year, the Corporation recognizes revenue from insurance assessments at the time a member credit union’s assessment payment is received. At September 30, 2022 and 2021, there were $6,294 and $0, respectively, of assessments receivable from member credit unions. The amount of the initial assessment is based on the application of 1.25% to excess shares and deposits at the date of approval for insurance. In addition, the Corporation may charge a higher initial assessment up to a maximum of its then current coverage ratio. Beginning January 1, 2019, any initial assessments are increased by 0.75%. Currently, the Corporation does not increase initial assessments for credit unions with less than $1,000,000 in excess shares and deposits at the date of approval for insurance. Future assessments are made on the application of 1.25% on any increase in excess shares and deposits. R ENTAL I NCOME Rental income consists of income from leases and from reimbursable expenses from the real estate investment. The Corporation commences rental revenue recognition when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. The Corporation does not have any percentage rent arrangements with its tenants. Reimbursable costs are included in rental income in the year earned.

2022 ANNUAL REPORT