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Music Library Association.

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NOTES TO FINANCIAL STATEMENTS

June 30, 2006

NOTE A -- Nature of business and significant accounting policies

Nature of business

The Music Library Association (the Association) was formed in 1945 as a non-stock, non-profit corporation. The primary purposes of the Association are to promote the establishment, growth, and use of music libraries; to encourage the collection of music and musical literature in libraries; to further studies in musical bibliography; to increase efficiency in music library service and administration; and to promote the profession of music librarianship.

A summary of significant accounting policies follows:

Basis of accounting

The financial statements of the Association have been prepared on the accrual basis of accounting and, accordingly, reflect all significant receivables, payables and other liabilities.

Basis of presentation

Financial statement presentation follows the recommendations of the Financial Accounting Standards Board in its Statement of Financial Accounting Standards (SFAS) No. 117, "Financial Statements of Not-for-Profit Organizations." Under SFAS No. 117, the Association is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets.

Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts...

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