L'ASSOCIATION DES FRANCOPHONES DE NANAIMO
NOTES TO FINANCIAL STATEMENTS
(Unaudited) Page 9

MARCH 31, 2013 AND 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

h) 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.

i) Contributed services and material

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

j) 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.

2. ADOPTION OF CANADIAN ACCOUNTING STANDARDS FOR NOT-FOR-PROFIT
ORGANIZATIONS

The Association adopted Canadian accounting standards for not-for-profit organizations ("ASNPO") on
April 1, 2012 for its year ended March 31, 2013. As these are the Association's first set of ASNPO
financial statements, they have been prepared retrospectively as at the opening statement of financial
position date of April 1, 2011. Retrospective preparation upon first-time adoption of ASNPO also allows
for the use of certain exemptions and elections. The Association has not made use of any exemptions or
elections.

The adoption of ASNPO resulted in a change in accounting policy with respect to the Association's
financial instruments. Under ASNPO, the Association accounts for its financial instruments following the
policies described in note 1(b). The Association previously followed the accounting policies for financial
instruments set out in Sections 3855 and 3861 of Part V of the CICA Handbook - Accounting. Although
there has been a change in accounting policy, there has been no effect on the carrying amounts of the
Association's financial instruments.

The adoption of ASNPO did not result in any other changes in accounting policy or changes in the carrying
amounts of the Association's assets and liabilities.

Accordingly, the adoption of ASNPO had no effect on the Association's opening statement of financial
position as at April 1, 2011, the comparative statement of financial position as at March 31, 2012 or its
deficiency of revenue over expenses for the year ended March 31, 2012.