Note 7: Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds

12 Months Ended

Dec. 31, 2012

Notes

Note 7: Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds

7)   Cemetery and Mortuary Endowment Care and Pre need Merchandise Funds

The Company is required by state law to pay into perpetual care trusts a portion of the proceeds from the sale of cemetery property interment rights. The related cemetery perpetual care trusts are defined as variable interest entities pursuant to generally accepted accounting principles. Also, management has determined that the Company is the primary beneficiary of these trusts, as it absorbs both a majority of the losses and returns associated with the trusts. The Company has consolidated cemetery perpetual care trust investments with a corresponding amount recorded as Cemetery Perpetual Care Obligation in the accompanying consolidated balance sheets.

The components of the cemetery perpetual care obligation are as follows:

		December 31
		2012		2011
Trust investments, at market value	$	2,090,111	$	1,810,185
Note receivables from Cottonwood Mortuary
Singing Hills Cemetery and Memorial Estates - Pinehill
eliminated in consolidation		1,927,926		1,971,750
Total trust assets		4,018,037		3,781,935
Cemetery perpetual care obligation		(3,153,001)		(2,983,077)
Fair value of trust assets in excess of trust obligations	$	865,036	$	798,858

The Company has established and maintains certain restricted trust investments to provide for future merchandise and service obligations incurred in connection with its pre-need sales. Such amounts are reported as restricted assets of cemeteries and mortuaries in the accompanying consolidated balance sheets.

Assets in the restricted asset account are summarized as follows:

		December 31
		2012		2011
Cash and cash equivalents	$	2,205,312	$	1,765,415
Mutual funds		504,170		470,049
Fixed maturity securities		8,775		8,775
Equity securities		81,242		78,712
Participating in Mortgage loans with Security National Life		1,155,628		1,069,546
Total	$	3,955,127	$	3,392,497

A surplus note receivable and interest, at December 31, 2012 and December 31, 2011 in the amount of $4,000,000 from Security National Life was eliminated in consolidation.