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Edmonton Opera Association 

Financial Statements 

June 30, 2013

Management's Responsibility 

To the Members of Edmonton Opera Association: 

Management is responsible for the preparation and presentation of the accompanying financial statements, including responsibility for 

significant accounting judgments and estimates in accordance with Canadian accounting standards for not-for-profit organizations and 

ensuring that all information in the annual report is consistent with the statements. This responsibility includes selecting appropriate 

accounting principles and methods, and making decisions affecting the measurement of transactions in which objective judgment is 

required. 

In discharging its responsibilities for the integrity and fairness of the financial statements, management designs and maintains the 

necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets 

are safeguarded and financial records are properly maintained to provide reliable information for the preparation of financial statements. 

The Board of Directors and Audit Committee are composed primarily of Directors who are neither management nor employees of the 

Association. The Board is responsible for overseeing management in the performance of its financial reporting responsibilities, and for 

approving the financial information included in the annual report. The Board fulfils these responsibilities by reviewing the financial 

information prepared by management and discussing relevant matters with management and external auditors. The Board is also 

responsible for recommending the appointment of the Association's external auditors. 

MNP LLP is appointed by the Members to audit the financial statements and report directly to them; their report follows. The external 

auditors have full and free access to, and meet periodically and separately with, both the Board and management to discuss their audit 

findings. 

October 8, 2013 

signed "Tim Yakimec" 

Business Manager 

signed "Debra King" 

Interim CFO

Independent Auditors' Report 

To the Members of Edmonton Opera Association: 

We have audited the accompanying financial statements of Edmonton Opera Association, which comprise the statement of financial 

position as at June 30, 2013, June 30, 2012, and July 1, 2011 and the statements of operations, changes in net assets and cash flows 

for the years ended June 30, 2013 and June 30, 2012, and a summary of significant accounting policies and other explanatory 

information. 

Management’s Responsibility for the Financial Statements 

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian 

accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable 

the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 

Auditors' Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance 

with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and 

perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The 

procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial 

statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the 

entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the 

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also 

includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by 

management, as well as evaluating the overall presentation of the financial statement. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. 

Basis for Qualified Opinion 

In common with many non-profit organizations, the Edmonton Opera Association derives part of its revenue from the general public in 

the form of donations, the completeness of which is not susceptible to satisfactory audit verification. Accordingly, our verification of these 

revenues was limited to the amounts recorded in the records of the Edmonton Opera Association, and we were not able to determine 

whether any adjustments might be necessary to donations and sponsorships revenue, deficiency of revenues over expenses and cash 

flows from operations for the years ended June 30, 2013 and June 30, 2012, and current assets and net assets as at June 30, 2013, 

June 30, 2012 and July 1, 2011. 

Qualified Opinion 

In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the financial 

statements present fairly in all material respects the financial position of Edmonton Opera Association as at June 30, 2013, June 30, 

2012 and July 1, 2011, and the results of its operations and cash flows for the years ended June 30, 2013 and June 30, 2012 in 

accordance with Canadian accounting standards for not-for-profit organizations. 

Edmonton, Alberta 

October 8, 2013 

Chartered Accountants 

Suite 400, 10104 - 103 Avenue NW, Edmonton, Alberta, T5J 0H8, Phone: (780) 451-4406, 1 (800) 661-7778


Statement of Financial Position 

As at June 30, 2013 

June 30 June 30 July 1 

2013 2012 2011 

(Restated 

Note 3) 

Assets 

Current 

Cash - - 499,133 

Accounts receivable (Note 5) 278,289 563,284 333,656 

Restricted cash (Note 7) 333,993 - - 

Inventory 802 702 - 

Prepaid expenses 109,872 152,188 18,221 

722,956 716,174 851,010 

Capital assets (Note 6) 1,304,312 824,606 355,695 

Cash and term deposits (Note 7) 353,875 329,243 326,500 

Grant receivable (Note 5) 45,000 - - 

2,426,143 1,870,023 1,533,205 

Liabilities 

Current 

Bank indebtedness 45,550 95,150 - 

Line of credit (Note 8) 60,000 75,000 - 

Accounts payable and accruals 389,826 162,468 47,714 

Deferred revenue 566,613 512,815 485,426 

Deferred grant revenue (Note 7), (Note 9) 1,497,492 682,087 527,000 

2,559,481 1,527,520 1,060,140 

Deferred capital contributions (Note 10) 35,000 70,000 105,000 

2,594,481 1,597,520 1,165,140 

Commitments (Note 13) 

Net Assets 

Unrestricted (1,535,564) (507,103) 92,370 

Internally restricted 25,000 25,000 25,000 

Invested in capital assets (Note 7) 1,342,226 754,606 250,695 

(168,338) 272,503 368,065 

2,426,143 1,870,023 1,533,205 

Approved on behalf of the Board 

signed "Irv Kipnes" 

Director 

signed "Ken Keenleyside" 

Director 

The accompanying notes are an integral part of these financial statements 

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Statement of Operations 

For the year ended June 30, 2013 

2013 2012 

(Restated 

Note 3) 

Revenue 

Donations and sponsorships (Note 11), (Note 12), (Note 15) 2,688,091 2,140,801 

Grant revenue (Note 9), (Note 10) 1,062,871 929,737 

Ticket sales 1,034,901 1,087,628 

Special events 490,411 430,960 

Set rentals & other 54,817 157,148 

5,331,091 4,746,274 

Expenses 

Production costs 3,331,712 2,528,212 

Special events and development 825,106 797,922 

General and administrative 680,496 371,808 

Promotion and advertising 663,011 961,650 

5,500,325 4,659,592 

Excess (deficiency) of revenue over expenses before amortization (169,234) 86,682 

Amortization expense 312,451 192,044 

Deficiency of revenue over expenses from operations (481,685) (105,362) 

Other income 

Foreign exchange gain 426 9,802 

Gain on disposal of capital assets 40,416 - 

40,842 9,802 

Deficiency of revenues over expenses (440,843) (95,560) 


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Statement of Changes in Net Assets 


Unrestricted 

Internally 

Restricted 

Invested in 

Capital 

Assets 

June 30 June 30 

2013 2012 

(Restated 

Note 3) 

(Restated 

Note 3) 

Net assets beginning of year, as 

previously stated 

(507,101) 25,000 665,606 183,505 368,065 

Correction of an error - - 89,000 89,000 - 

Net assets, beginning of year, as 

restated 

(507,101) 25,000 754,606 272,505 368,065 

Deficiency of revenues over expenses (236,307) - (204,536) (440,843) (95,560) 

Investment in capital assets (792,156) - 792,156 - - 

Net assets, end of year (1,535,564) 25,000 1,342,226 (168,338) 272,505 


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Statement of Cash Flows 


2013 2012 

Cash provided by (used for) the following activities 

Operating 

Cash received from patrons, donors, and grantors 6,133,370 4,368,066 

Cash paid to suppliers and employees (4,961,921) (4,379,659) 

Interest received 17 3,265 

1,171,466 (8,328) 

Financing 

Advances on line of credit 2,600,000 1,185,000 

Repayments on line of credit (2,615,000) (1,110,000) 

Advance of note payable 450,000 - 

Repayment of note payable (450,000) - 

(15,000) 75,000 

Investing 

Purchase of short term investments (21,132) - 

Purchase of capital assets (792,157) (660,955) 

Proceeds on sale of capital assets 40,416 - 

(772,873) (660,955) 

Increase (decrease) in cash resources 383,593 (594,283) 

Cash resources (deficiency), beginning of year (95,150) 499,133 

Cash resources, end of year 288,443 (95,150) 

Cash resources (deficiency) are composed of: 

Restricted cash total 333,993 - 

Bank indebtedness (45,550) (95,150) 

288,443 (95,150) 


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Notes to the Financial Statements 


1. Incorporation and operations 

The Edmonton Opera Association was formed under the Societies Act (Alberta) in 1963 with the general purpose of 

presenting Opera to northern Alberta. The Association is a not-for-profit organization and accordingly, exempt from income 

tax in accordance with Section 149(1)(l) of the Canadian Income Tax Act and Section 35 of the Alberta Corporate Income 

Tax Act. 

2. Impact of adopting accounting standards for not-for-profit organizations 

These are the Association’s first financial statements prepared in accordance with Canadian accounting standards for notfor-profit 

organizations (ASNPO). The accounting policies in Note 4 have been applied in preparing the financial statements 

for the year ended June 30, 2013, the comparative information for the year ended , and the opening ASNPO statement of 

financial position as at July 1, 2011 (the Association’s date of transition to ASNPO). 

In preparing these financial statements, the Association has elected not to apply transitional provisions permitted by CICA 

1501 First-time adoption by not-for-profit organizations at the date of transition to ASNPO. 

The transition to ASNPO has not affected the statement of financial position, statement of operations, statement of changes 

in net assets or statement of cash flows previously reported under Canadian generally accepted accounting principles 

(GAAP). 

3. Correction of an error 

During the year ending June 30, 2013 the Association determined that costs relating to the leasehold improvements of the 

production facility were expensed during the 2012 year end. These costs should have been capitalized as part of the 

production facility asset. 

As such for the current and prior year the impact of this correction has resulted in an increase to opening invested in capital 

assets fund of $89,000 as at June 30, 2013, an increase to capital assets of $89,000 as at June 30, 2012 and a decrease in 

production costs expense of $89,000 for the year ended June 30, 2012. 

4. Significant accounting policies 

The financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit 

organizations as issued by the Accounting Standards Board in Canada and include the following significant accounting 

policies: 

Revenue recognition 

The Association follows the deferral method of accounting for contributions. 

Unrestricted donations, including pledges, are recorded as revenue when received or receivable if the amount to be 

received can be reasonably estimated and collection is reasonably assured. Restricted donations are recognized as 

revenue in the year in which the related expenses are incurred. 

Ticket and special events revenue are recognized when the event has occurred. 

Grants are recognized as revenue in the fiscal year to which they relate, or as deferred revenue when related to the cost of 

a capital asset. 

Donated materials and services 

Contributions of materials and services are recognized both as contributions and expenses in the statement of operations 

when a fair value can be reasonably estimated and when the materials and services are used in the normal course of the 

Association's operations and would otherwise have been purchased. 

Volunteers contribute significant amounts of time to the activities of the Association without compensation. The financial 

statements do not reflect those contributed services as no reliable basis exists for determining their fair value. 

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4. Significant accounting policies (Continued from previous page) 

Cash and short term investments 

Cash and cash equivalents include balances with banks and short-term investments with maturities of three months or less. 

Cash and term deposits held for other than current purposes are classified as long-term assets. 

Cash subject to restrictions that prevent its use for current purposes is included in restricted cash. 

Capital assets 

Purchased capital assets are recorded at cost. Contributed capital assets are recorded at fair value at the date of 

contribution if fair value can be reasonably determined. 

Amortization is provided using the straight-line method at rates intended to amortize the cost of assets over their estimated 

useful lives. 

The Association regularly reviews its capital assets to write off obsolete items. 

Foreign currency translation 

Method 

Rate 

Production facility straight-line 10 years 

Computer equipment straight-line 5 years 

Computer software straight-line 10 years 

Production assets - sets straight-line 4-10 years 

Accounts in foreign currencies have been translated into Canadian dollars using the temporal method. Under this method, 

monetary assets and liabilities have been translated at the year end exchange rate. Non-monetary assets have been 

translated at the rate of exchange prevailing at the date of transaction. Revenues and expenses have been translated at the 

average rates of exchange during the year, except for amortization, which has been translated at the same rate as the 

related assets. 

Foreign exchange gains and losses on monetary assets and liabilities are included in the determination of deficiency of 

revenue over expenses. 

Measurement uncertainty (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 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 collectability and an appropriate allowance for doubtful accounts 

is provided where considered necessary. Provisions are made for slow moving and obsolete inventory. Amortization is 

based on the estimated useful lives of capital assets. 

These estimates and assumptions are reviewed periodically and, as adjustments become necessary they are reported in 

deficiency of revenues and expenses in the periods in which they become known. 

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5. Accounts receivable 

2013 2012 

Pledges and trade receivables 281,289 563,284 

Allowance for doubtful accounts (3,000) - 

278,289 563,284 

As at June 30, 2013, accounts receivable included $250,000 (2012 - $117,500) of outstanding pledges which were fully 

received during fiscal 2014. Included in accounts receivable at year end is $9,789 (2012 - $8,866) receivable from Canada 

Revenue Agency. 

Grant receivables consist of $45,000 (2012 - $nil) of grant monies which are anticipated to be received after June 30, 2014. 

6. Capital assets 

2013 

Accumulated Net book 

Cost amortization value 

Production facility 389,094 38,988 350,106 

Computer equipment 179,791 53,299 126,492 

Computer software 151,834 28,085 123,749 

Production assets - sets 1,512,743 808,778 703,965 

2,233,462 929,150 1,304,312 

2012 

Accumulated Net book 

Cost amortization value 

Production facility 89,000 - 89,000 

Computer equipment 179,791 36,244 143,547 

Computer software 126,169 12,617 113,552 

Production assets - sets 1,115,268 636,761 478,507 

1,510,228 685,622 824,606 

7




7. Internally restricted funds 

2013 2012 

Province of Alberta - Working capital reserve 301,500 301,500 

Canadian Actors' Equity Association - restricted term deposit 25,000 25,000 

Canadian Actors' Equity Association - cash bond 23,876 2,743 

Accrued interest on funds 3,499 - 

353,875 329,243 

The Association has a letter of credit outstanding to the Canadian Actors' Equity Association in the amount of $25,000 

(2012 - $25,000). 

The Association maintains restricted term deposits in the amount of $25,000 (2012 - $25,000) for the Canadian Actors' 

Equity Association as required under Clause 25 of the July 2007 Opera Agreement. The additional cash bond held by the 

Canadian Actors' Equity Association also relates to this agreement. This amount becomes payable to the Canadian Actors' 

Equity Association if the Edmonton Opera Association fails to meet payroll obligations for any production. 

The Association has deferred $231,500 (2012 - $231,500) of grant revenue for a working capital reserve, an additional 

$70,000 (2012 - $70,000) of cash is included in the long-term cash and term deposits as part of the assets associated with 

this reserve. The working capital reserve has been established to meet the requirements of an Alberta Foundation for the 

Arts grant program and may not be expended without a resolution from the Board of Directors. 

The Association holds restricted cash of $333,993 (2012 - $nil) relating to the production facility. 

8. Authorized line of credit 

The Association has a revolving line of credit that bears interest at prime, to maximum of $300,000, and is secured by a 

general security agreement. Drawings on the line of credit at year-end are $60,000 (2012 - $75,000). 

9. Deferred grant revenue 

2012 

Amounts 

received 

Amounts 

recognized 

as revenue 2013 

Canada Council 163,000 310,700 327,000 146,700 

Province of Alberta - working capital reserve 231,500 - - 231,500 

Province of Alberta - operating funding 255,087 160,508 275,699 139,896 

Alberta Lottery 32,500 - 32,500 - 

Province of Alberta - production facility - 400,000 28,355 371,645 

Federal government - production facility - 450,000 - 450,000 

City of Edmonton - production facility - 150,000 10,633 139,367 

Community Spirit - 25,000 25,000 - 

Edmonton Community Foundation - 36,768 18,384 18,384 

Edmonton Arts Council - 310,000 310,000 - 

Other grant - 300 300 - 

682,087 1,843,276 1,027,871 1,497,492 

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10. Deferred capital contributions 

Deferred capital contributions related to capital assets represent the unamortized portion of restricted contributions that 

were used to fund capital assets. Recognition of these amounts as revenue is deferred to periods when the related capital 

assets are amortized. 

2013 2012 

Balance, beginning of year 70,000 105,000 

Recognized as revenue (35,000) (35,000) 

Balance, end of year 35,000 70,000 

11. Endowments 

The Association has several endowment funds held by the Edmonton Community Foundation of $3,313,977 as of 

December 31, 2012 (2011 - $2,959,851). The endowment funds include several family funds along with the Edmonton 

Opera Endowment Fund and the Irving Guttman Opera Endowment Fund. 

Donation revenue of $131,149 (2012 - $140,720) was received in the year from the above noted funds. 

12. Donations and sponsorships 

2013 2012 

Edmonton Opera Association donations 2,556,942 2,000,081 

Edmonton Community Foundation donations 131,149 140,720 

2,688,091 2,140,801 

All Edmonton Community Foundation donations received in the year were contributed to the Edmonton Opera Endowment 

Fund of the Edmonton Community Foundation. 

Donations and sponsorships includes contributions from corporate, foundation and individual donors. 

Included in donations and sponsorships is $268,402 (2012 - $269,088) which represents the fair value of material and 

services provided to the Association. The corresponding amounts have been charged to expenses. 

13. Commitments 

The Association has entered into a four-year lease agreement of the production facility space as of fiscal 2013, . The 

estimated lease payments for all leases for the next four years are as follows: 

2014 191,312 

2015 198,041 

2016 173,046 

562,399 

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14. Financial instruments 

The Association, as part of its operations, carries a number of financial instruments. It is management's opinion that the 

Association is not exposed to significant interest, currency, credit, liquidity or other price risks arising from these financial 

instruments except as otherwise disclosed. 

Interest rate risk 

Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest 

rates. Changes in market interest rates may have an effect on the cash flows associated with some financial assets and 

liabilities, known as cash flow risk, and on the fair value of other financial assets or liabilities, known as price risk. In 

seeking to minimize the risks from interest rate fluctuations, the Association manages exposure through purchasing 

securities with fixed interest rates and short term maturities. The Association is exposed to interest rate risk primarily 

relating to its term deposits, which are at fixed interest rates and mature within one year, and its line of credit which bears 

interest at a floating rate as described in note 8. 

Credit concentration 

At June 30, 2013, approximately 71% (2012 - 18%) of the Association's accounts receivable balance was due from a single 

donor, which has been collected subsequent to year-end. 

Liquidity risk 

Liquidity risk is the risk that the Association will encounter difficulty in meeting obligations associated with financial liabilities. 

The Association’s exposure to liquidity risk is dependent on the collection of accounts receivable and grants receivable. 

15. Economic dependence 

The Association's primary source of revenue is received from government grant revenue and an individual donor. The 

Association's ability to continue viable operations is dependent on maintaining equivalent funding from these sources. 

16. Change in accounting estimate 

Effective June 30, 2013, the Association revised the estimated useful life of of a number of production assets - sets from 5 

to 8 years to 10 years. This change in useful life was applied prospectively and prior year results have not been restated. 

For the year ended June 30, 2013, the change resulted in a decrease of $32,360 in accumulated amortization on the 

production assets - sets and a decrease of $32,360 in amortization expense. 

17. Comparative figures 

Certain comparative figures have been reclassified to conform with current year presentation. 

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