NATIONAL OILHEAT RESEARCH ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017 AND 2016
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Assessments Revenue
The NORA Public Law 113-79 requires wholesale distributors of No. 1 distillate and No. 2 dyed distillate to remit an
assessment of two-tenths of one cent per gallon at the point of sale to the Alliance. If the No. 1 distillate or No. 2 dyed
distillate is imported after the point of sale, the assessment is to be made when the product enters the United States of
America. Assessments are due to be remitted to the Alliance at least quarterly.
Under NORA Public Law 113-79's collections rules, any dyed distillate or blends are subject to assessment. Some of
this fuel is used for non-heating applications and is refunded. Assessments revenue is presented in the accompanying
statements of activities net of refunds recorded of $1,264,055 and $1,282,170 for the years ended December 31, 2017
and 2016, respectively.
Income Tax Status
The Alliance received a determination letter from the Internal Revenue Service (IRS) that it has been granted an
exemption from federal income taxes and it qualifies under Section 501(c)(6) of the Internal Revenue Code. The
Alliance believes its operations are consistent with the nature of their exemption granted by the IRS. There is no current
liability for income taxes on unrelated business income and no temporary differences resulting in deferred taxes as of
December 31, 2017 and 2016.
The Alliance is required to measure, recognize, present, and disclose in its financial statements uncertain income tax
positions the Alliance has taken in the tax years that remain subject to examination or expects to take on an income tax
return. The Alliance recognizes the tax benefits from uncertain income tax positions only if it is more likely than not the
tax position will be sustained on examination by tax authorities. The Alliance recorded no liability for uncertain income
tax positions for any open tax years.
Subsequent Events
The Alliance has evaluated subsequent events through June 5, 2018, which is the date the financial statements were
available to be issued.
Reclassifications
Certain 2016 amounts have been reclassified to conform with 2017 classifications.
NOTE 3 - CONCENTRATIONS OF CREDIT RISK
The Alliance has exposure to credit risk on its cash and investments held in broker-managed accounts. The assets are
insured by the Securities Investor Protection Corporation (SIPC), which protects investors for up to $500,000 including a
maximum of $250,000 for claims of cash if the brokerage firm holding the assets becomes insolvent, but it does not
insure the underlying assets of $9,343,450 as of December 31, 2017. Management does not consider this a significant
concentration of credit risk.
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