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Edmonton Opera Association
Notes to the Financial Statements
For the year ended June 30, 2013
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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