2007 annual report aveiro investment corp. - First West Properties

NOTES TO THE FINANCIAL STATEMENTS June 30, 2007 and 2006
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
(h) Equipment
Equipment is carried at cost less accumulated amortization. Additions and improvements are capitalized while repairs
and maintenance are charged to expenses as incurred.
Amortization on equipment is provided on the following basis and rates:
Computer hardware 20% declining balance
Offi ce equipment 20% declining balance
Software 2 years straight line
(i) Recent accounting pronouncements
In 2005, the Canadian Institute of Chartered Accountants (“CICA”) issued three new accounting standards: Handbook
Section 1530, “Comprehensive Income”, Handbook Section 3855, “Financial Instruments – Recognition and Measurement”,
and Handbook Section 3865, “Hedges”. The new standards introduce the Statement of Comprehensive Income which is
used to temporarily provide for gains and losses including foreign currency translation adjustments for net investments
of self sustaining foreign operations and other amounts arising from changes in fair value of investments categorized
as available for sale until they are realized and recorded in earnings. As well, all other fi nancial instruments, including
derivatives, are to be included in the Company’s balance sheet and measured at fair value. In certain situations assets that
are classifi ed as held to maturity will continue to be measured at cost or amortized cost.
The new standards also include further clarifi cation on the application of hedge accounting which will have no impact on
the Company’s fi nancial statements since the Company does not intend to enter into any hedging relationships. These
new standards are effective for fi scal years beginning on or after October 1, 2006 and early adoption is permitted. The
Company has assessed the impact of these new accounting standards on the fi nancial statements at July 1, 2007 and has
determined that these standards will not have a material impact.
In July of 2006, the CICA replaced Handbook Section 1506, “Accounting Changes” with a new Section 1506, “Accounting
Changes” to substantially harmonize with International Accounting Standards for the accounting and disclosure of changes
in accounting policies, estimates and errors. Under the new standard, accounting changes should be applied retrospectively
unless otherwise permitted or where impracticable to determine. In addition, voluntary changes in accounting policy are
made only if they result in the fi nancial statements providing reliable and more relevant information. New disclosure is
required for changes in accounting policies, changes in accounting estimates and correction of errors. The standard is
effective for fi scal years beginning on or after January 1, 2007. The Company does not expect the application of this revised
standard to have a material impact on the fi nancial statements.
In December 2006, the CICA issued two new accounting standards: Handbook Section 3862, “Financial Instruments – Disclosures”
and Section 3863, “Financial Instruments – Presentation”. These new standards will require increased disclosure of fi nancial
instruments with particular emphasis on the risks associated with recognized and unrecognized fi nancial instruments and how
those risks are managed. The standards are effective for fi scal years beginning on or after October 1, 2007 and the Company is
currently considering the additional disclosures, if any, required in future fi nancial statements.
Aveiro Investment Corp. | 2007 Annual Report | 37