L' Association Des Francophones De Nanaimo

Notes to the Financial Statements
For the year ended March 31, 2008

Significant accounting policies (Continued from previous page)

Loans and receivables:

The Association has classified the following financial assets as loans and receivables: accounts receivable. These assets are
initially recognized at their fair value. Fair value is approximated by the instrument’s initial cost in a transaction between
unrelated parties.

Loans and receivables are subsequently measured at their amortized cost, using the effective interest method. Under this
method, estimated future cash receipts are exactly discounted over the asset’s expected life, or other appropriate period, to
its net carrying value. Amortized cost is the amount at which the financial asset is measured at initial recognition less
principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference
between that initial amount and the maturity amount, and less any reduction for impairment or uncollectability. Gains and
losses arising from changes in fair value are recognized in revenues or expenses upon derecognition or impairment.

Other financial liabilities:

The Association has classified the following financial liabilities as other financial liabilities: accounts payable and accruals.
These liabilities are initially recognized at their fair value. Fair value is approximated by the instrument’s initial cost ina
transaction between unrelated parties. Transactions to purchase or sell these items are recorded at the settlement date, and
transaction costs are immediately recognized in expense, and transaction costs arising from their disposal are immediately
recognized: in expense. Total interest expense, calculated using the effective interest rate method, is recognized in expense.

Fees incurred on an exchange of financial liabilities or a modification of the terms of financial liabilities that is accounted
for as an extinguishment are included as part of the gain or loss on extinguishment, while any related other costs incurred
are recognized in expense. Any fees incurred on the exchange or modification of a financial liability not accounted for as an
extinguishment are included in the carrying amount of the modified financial liability and amortized over its remaining
expected life. Any related other costs incurred are recognized in expense.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Under this
method, estimated future cash payments are exactly discounted over the liability’s expected life, or other appropriate period,
to its net carry value. Amortized cost is the amount at which the financial liability is measured at initial recognition less
principal repayments, and plus or minus the cumulative amortization using the effective interest method of any difference
between that initial amount and the maturity amount. Gains and losses arising from changes in fair value are recognized in
revenues or expenses upon derecognition or impairment.

Financial asset impairment:

The Association assesses impairment of all its financial assets, except those classified as held for trading. Management
considers whether the issuer is having significant financial difficulty or whether payments have been made when due in
determining whether objective evidence of impairment exists. Impairment is measured as the difference between the asset's
carrying value and its fair value. Any impairment, which is not considered temporary, is included in expense.

Gifts in kind

Contributed materials and services are recognized in the financial statements when their fair value can be reasonably
determined and they are used in the normal course of the organization's operations and would otherwise have been
purchased.

Reporting currency

In these financial statements, unless otherwise indicated, all dollar amounts are expressed in Canadian dollars.

. Mp