Annual Report 2010/11

Notes to the Consolidated Financial StatementsFor the Year Ended June 30, 2011 (thousands of dollars)(f)InventoriesInventories held for resale are valued at the lower of cost or net realizable value, with costdetermined on a moving average basis. Inventories held for consumption are valued at cost.(g) Foreign Currency TranslationFinancial assets and liabilities recorded in foreign currencies are translated to Canadian dollars atthe year-end exchange rate. Revenues and expenses are translated at daily exchange rates. Gainsor losses from these transactions are included in investment income.(h) Employee Future BenefitsPensionThe University participates with other employers in the Local Authorities Pension Plan (LAPP).This pension plan is a multi-employer defined benefit pension plan that provides pensions for theUniversity’s participating employees, based on years of service and earnings.The University does not have sufficient plan information on the LAPP to follow the standardsfor defined benefit accounting, and therefore follows the standards for defined contributionaccounting. Accordingly, pension expense recorded for the LAPP is comprised of employercontributions to the plan that are required for its employees during the year; which are calculatedbased on actuarially pre-determined amounts that are expected to provide the plan’s futurebenefits.Supplementary Retirement plansThe University maintains a supplementary pension plan for its current senior executives. Thepension expense for the defined benefit supplementary retirement plan is actuarially determinedusing the projected benefit method prorated on service. Actuarial gains or losses on the accruedbenefit obligation are amortized over the expected average remaining service life.(i)Financial InstrumentsThe University’s financial assets and liabilities are generally classified and measured as follows:Financial Statement Components Classification MeasurementCash and cash equivalents Held-for-trading Fair valueAccounts receivable Loans and receivables Amortized costInvestments Held-for-trading Fair valueAccounts payable and accrued liabilities Other liabilities Amortized costAccrued vacation pay other liabilities Amortized costLong-term liabilities other liabilities Amortized costFinancial instruments classified as held-for-trading are measured at fair value with changes in fairvalue recognized in the Statement of Operations. Financial instruments classified as loans andreceivables and classified as other financial liabilities are measured at amortized cost with gainsand losses recognized in the Statement of Operations when the asset or liability is derecognized.The value of the University’s financial instruments are recognized on their settlement date.Transaction costs related to all financial instruments are expensed as incurred.consolidated financial statements 2010/2011 45