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)

Revenue recognition

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

Grant revenue is recognized as revenue in the funding period or when the expenditure is made, as applicable. Donation
revenue is recognized when the contribution is received. Gifts in kind are recognized in the year received. Goods sold, fees
and miscellaneous revenue are recognized when cash is received and the service or product is delivered.

Inventory

Inventory is valued at the lower of cost if purchased, fair value if contributed and net realizable value.

Capital assets

Capital assets are carried at cost if purchased, or fair value at the date of acquisition if received by gift. Proceeds of
disposals, less carrying values of these assets are reported in the statement of operations as gains or losses on disposal.
Amortization is provided using the straight-line method at rates intended to amortize the cost of assets over their estimated
useful lives.

Rate
Computer equipment 3 years
Computer software 1 years
Equipment 5 years
Furniture and fixtures 5 years

Small tools 5 years

In the year of acquisition, amortization is taken at one-half of the above rates.
Measurement uncertainty (use of estimates)

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Accounts receivable are stated after evaluation as to their collectibility and an appropriate
allowance for doubtful accounts is provided where considered necessary. Amortization is based on the estimated useful life
of equipment. Provisions are made for slow moving and obsolete inventory.

These estimates and assumptions are reviewed periodically and, as adjustments become necessary they are reported in
earnings in the periods in which they become known.

Financial instruments
Held for trading:

Any financial instrument whose fair value can be reliably measured may be designated as held for trading on initial
recognition or adoption of CICA 3855 Financial Instruments - Recognition and Measurement, even if that instrument would
not otherwise satisfy the definition of held for trading. The Association has classified the following financial assets and
liabilities as held for trading: cash, bank indebtedness, short term investment, and investment. These instruments are
initially recognized at their fair value. Fair value is approximated by the instrument’s initial cost in a transaction between
unrelated parties.

Held for trading financial instruments are subsequently measured at their fair value. Gains and losses arising from changes
in fair value are recognized immediately in revenue or expense.

, Mp