2006-2007 Annual Report - Canadian Association of Fairs and ...

Canadian Association of Fairs and ExhibitionsNOTES TO FINANCIAL STATEMENTSJULY 31, 20071. PURPOSE OF THE ORGANIZATIONThe Canadian Association of Fairs and Exhibitions/Association canadienne des foires et expositions (CAFE/ACFE) is thenational association representing fairs, exhibitions and agricultural society organizations and such other firms, organizationsand enterprises as may rely on the Canadian Fair Industry for an important part of their continuing livelihood.The CAFE/ACFE is incorporated under Part II of the Canada Corporations Act as a not-for-profit organization and qualifies asa registered charity under the Income Tax Act.2. SIGNIFICANT ACCOUNTING POLICIES(a)(b)(c)(d)(e)Accrual Basis of AccountingRevenue and expenditure are recorded on the accrual basis, whereby they are reflected in the accounts in the period inwhich they have been earned and incurred respectively, whether or not such transactions have been finally settled by thereceipt or payment of money.Short-Term InvestmentsShort-term investments are recorded at cost, which approximates market value.Capital Assets and AmortizationCapital assets acquired for administration are recorded at cost, less accumulated amortization. Amortization is providedon a straight line basis over three years for software, furniture and fixtures and over five years for leasehold improvements.Capital assets acquired in connection with funded projects are expensed during the year as project expenditures.Agriculture Agri-Food Program and Ontario Trillium FoundationAs per the project contracts with Agriculture and Agri-Food Canada (AAFC) and Ontario Trillium Foundation (OTF),contributions are subject to certain terms and conditions regarding the expenditure of the funds, with expenditures chargedagainst these contributions being subject to audit by the Minister and OTF respectively. As a result, adjustments may bemade to the original contributions received. The effect on net revenue or expenditure of any adjustment arising from suchaudits, if any, will be reflected in the year in which the audits are completed.Use of EstimatesThe preparation of financial statements in conformity with Canadian generally accepted accounting principles requiresmanagement to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues andexpenditures and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.14