Cemetery and Mortuary Endowment Care and Pre-need Merchandise Funds

12 Months Ended

Dec. 31, 2011

Cemetery and Mortuary Endowment Care and Pre-need Merchandise Funds

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,
	2011			2010
Trust investments, at market value	$	1,810,185		$	1,454,694
Note receivables from Cottonwood Mortuary

Singing Hills Cemetery and Memorial Estates - Pinehill eliminated in consolidation		1,971,750			2,013,174
Total trust assets		3,781,935			3,467,868
Cemetery perpetual care obligation		(2,983,077	)		(2,853,727	)
Fair value of trust assets in excess of trust obligations	$	798,858		$	614,141

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,
	2011		2010
Cash and cash equivalents	$	1,765,415	$	1,522,295
Mutual funds		470,049		467,413
Fixed maturity securities		8,775		8,775
Equity securities		78,712		78,020
Participating in Mortgage loans with Security National Life		1,069,546		989,876
Total	$	3,392,497	$	3,066,379

A surplus note receivable and interest, at December 31, 2010 and December 31, 2011 in the amount of $4,000,000 from Security National Life was eliminated in consolidation.