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L'ASSOCIATION DES FRANCOPHONES DE NANAIMO
NOTES TO FINANCIAL STATEMENTS

(Unaudited) Page 8

MARCH 31, 2016

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) 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.

e) Use of estimates

The preparation of financial statements in conformity with Canadian accounting standards for not-for-
profit organizations requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ from those estimates.
Significant areas requiring the use of management estimates relate to the determination of the useful
lives of assets for amortization, recognition of deferred revenue and the amounts recorded as accrued
liabilities.

f) Contributed services and material

Contributed materials and services are recognized only when their fair value can be reasonably
estimated.

g) Income taxes

The Association is a not-for-profit organization as defined by the Canada Revenue Agency and as
such is not subject to income taxes.