Annual Report 2008-2009 - National Gallery of Canada

2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Property and Equipment
Land and buildings owned by the Government of Canada and under the control of the Gallery are recorded at their estimated
historical cost for land and at their estimated historical cost less accumulated amortization for buildings. The estimated historical
net costs of the buildings have been credited to deferred capital funding and the estimated historical cost of the land
has been credited to contributed surplus. Other property and equipment are recorded at cost.
Amortization is calculated using the straight-line method over their estimated useful lives as follows:
Buildings
Building improvements
Equipment and furniture
Vehicles
40 years
10 to 25 years
3 to 12 years
5 years
Uncompleted capital projects are transferred to the appropriate property and equipment classification upon completion, and
are then amortized.
(d) Collection
The Gallery holds a collection of works of art for the benefit of Canadians, present and future. The collection is shown as an asset
at a nominal value of $1,000 due to the practical difficulties of determining a meaningful value for these assets. Works of art
purchased for the collection of the Gallery are recorded as an expense in the year of acquisition. Works of art donated to the
Gallery are recorded as assets at a nominal value.
(e) Employee Future Benefits
Pension Benefits
All eligible employees participate in the Public Service Pension Plan administered by the Government of Canada. The Gallery’s
contribution reflects the full cost as employer. This amount is currently based on a multiple of the employee’s required contributions,
and may change over time depending on the experience of the Plan. These contributions represent the total pension
obligations of the Gallery and are expensed during the year in which the services are rendered. The Gallery is not currently
required to make contributions with respect to actuarial deficiencies of the Public Service Pension Plan.
Severance Benefits
Employees are entitled to severance benefits, as provided for under labor contracts and conditions of employment. The cost of
these benefits is accrued as the employees render the services necessary to earn them. The accrued benefit obligation is calculated
based on management’s best estimate and assumptions, on the employees’ salaries and number of years of service at
March 31. These benefits represent an obligation of the Gallery that entails settlement by future payment.
(f) Foreign currency translation
Assets and liabilities denominated in foreign currencies are translated into Canadian dollars using exchange rates at the balance
sheet date for monetary assets and liabilities. Revenues and expenses are translated at exchange rates in effect at the time of
the transaction. Foreign currency exchange gains or losses for the year are included in financial charges (refer to Schedule 2,
miscellaneous).
80 Financial Statements