L'Association Des Francophones De Nanaimo

Notes to the Financial Statements
For the year ended March 31, 2009

Significant accounting policies (Continued from previous page)

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:

The Association has classified the following financial assets and liabilities as held for trading: cash, short term investment,
investment and bank indebtedness.

The Association's held for trading instruments are initially recognized at their fair value. Fair value is approximated by the
instrument's initial cost in a transaction between unrelated parties. Transactions to purchase or sell these items are
recorded on the trade date.

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 excess (deficiency) of revenues over expenses.

Loans and receivables:

The Association has classified accounts receivable as loans and receivables. 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.
Transactions to purchase or sell these items are recorded on the trade date.

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 excess (deficiency) of revenues over expenses upon
derecognition or impairment.

Other financial liabilities:

The Association has classified accounts payable and accruals as other financial liabilities. These liabilities are initially
recognized at their fair value. Fair value is approximated by the instrument's initial cost in a transaction between unrelated
parties. Transactions to purchase or sell these items are recorded on the trade date.

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 their net carrying 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
excess (deficiency) of revenues over expenses upon derecognition.

Financial asset impairment:

The Association assesses impairment of all its financial assets, except those classified as held for trading. 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 current year excess (deficiency) of revenues over expenses.

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