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L'ASSOCIATION DES FRANCOPHONES DE NANAIMO
NOTES TO FINANCIAL STATEMENTS
(Unaudited) Page 8

MARCH 31, 2013 AND 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

c) Inventory

Inventory is stated at the lower of cost and estimated net realizable value. Cost has been determined on a
first-in, first-out basis. The inventory consists of retail products available for resale.

d) Amortization

Capital assets are recorded at historical cost and amortization is provided using the straight-line method at
rates intended to amortize the costs of the assets over their estimated useful lives:

Rate
Furniture and fixtures 5 years
Equipment 5 years

The Association records one-half of the annual amortization in the year that an asset is purchased.

e) Long-lived assets

The Association monitors the recoverability of long-lived assets, based on factors such as current market
value and future asset utilization. The Association's policy is to record an impairment loss when it is
determined that the carrying amount of the assets may not be recoverable. To March 31, 2013, no
impairment losses have been recorded.

f) Revenue recognition

The Association follows the deferral method of accounting for revenue. Restricted revenue is recognized
in the year in which the related expenses are incurred. Unrestricted revenue is recognized when received
or receivable if the amount to be received can be reasonably estimated and collection is reasonably
assured.

g) Deferred revenue

Deferred revenue represents restricted funding received in the current period that is related to a
subsequent period.