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

12 Months Ended

Dec. 31, 2013

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
	2013	2012
Trust investments, at market value	$ 2,414,883	$ 2,090,111
Note receivables from Cottonwood Mortuary
Singing Hills Cemetery and Memorial Estates - Pinehill
eliminated in consolidation	1,881,565	1,927,926
Total trust assets	4,296,448	4,018,037
Cemetery perpetual care obligation	(3,266,131)	(3,153,001)
Fair value of trust assets in excess of trust obligations	$ 1,030,317	$ 865,036

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. Also included in cash and cash equivalents are escrows held for borrowers under servicing agreements relating to mortgage loans and funds held by warehouse banks in accordance with loan purchase agreements.

Assets in the restricted asset account are summarized as follows:

	December 31
	2013	2012
Cash and cash equivalents	$ 4,746,417	$ 7,617,143
Mutual funds	582,163	504,170
Fixed maturity securities	8,775	8,775
Equity securities	84,986	81,242
Participating in mortgage loans with Security National Life	1,248,639	1,155,628
Total	$ 6,670,980	$ 9,366,958

A surplus note receivable and interest, at December 31, 2013 and December 31, 2012 in the amount of $4,000,000 from Security National Life was eliminated in consolidation.