LAKELAND COLLEGE Annual Repor t 2008 - 2009

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26 ANNUAL REPORT 2008-2009 (d) Financial Instruments The fair values of the College’s accounts receivable, accounts payable and accrued liabilities and accrued vacation pay are valued in accordance with the methods described below. Fair value of publicly traded securities are based on closing market prices. The College has classified its significant financial assets and financial liabilities as follows: - Cash and investments are classified as available-for-sale, and are measured at fair value with subsequent gains or losses included in net assets or deferred contributions until the asset is removed from the Statement of Financial position. Details of this are outlined in Note 11. - Accounts receivable classified as other loans and receivables. After initial fair value measurement, they are measured at amortized cost. - Accounts payable, accrued liabilities and employee benefits liabilities are classified as other financial liabilities. After their initial fair value measurement, they are measured at amortized cost using the effective interest rate method. Financial instruments of the College are exposed to credit risk, interest rate risk, foreign exchange risk and market risks. The College’s accounts receivable are due from a diverse group of customers and are subject to normal credit risk. The interest rate risk is the risk to the College’s earnings that arises from the fluctuations in interest rates and the degree of volatility of these rates. The foreign exchange risk is the risk of the rising costs related to purchase transactions in United States currency and the reduction of amounts collected for receivables which are due in United States currency. The market risk is the risk to the College’s earnings that arises from the fluctuation and the degree of volatility in the market value of long-term investments. Each of these risks is limited through the College’s collection procedures, investment guidelines and other internal policies, guidelines and procedures. Fixed income and marketable equity securities are classified as available-for-sale (investments held for long-term capital appreciation and generation of income), and are measured at fair value at each reporting date. The College utilizes settlement-date accounting for all purchases and sales of financial assets in its investment portfolio. Fixed income securities are initially recognized at acquisition cost (purchase price plus transaction costs), which reflects any premium or discount at date of purchase, and carried at fair value. Marketable equity securities are also initially recognized at acquisition cost, and subsequently measured at fair value. Financial assets classified as available-for-sale are measured at fair value with changes in fair values recognized in the Statement of Changes in Net Assets or deferred contributions as appropriate until realized, at which time the cumulative changes in fair value are recognized in the Statement of Operations. The College does not use hedge accounting and accordingly, is not impacted by the requirement of Section 3865 Hedges. As permitted for Not-for-Profit Organizations, Lakeland has elected not to apply the standards for permitted for Not-for-Profit Organizations, Lakeland has elected not to apply the standards for embedded non-financial contracts and has elected to continue using section 3861: Disclosure and Presentation. (e) Employee Future Benefits The College participates in the Province of Alberta’s Local Authorities and the Management Employees Pension Plans. These pension plans are multi-employer defined benefit plans that provide pensions for the College’s participating employees, based on years of service and earnings. Pension costs included in these financial statements comprise the amount of employer contributions required for its employees during the year, based on rates which are expected to provide for benefits payable under the Local Authority and the Management Employees Pension Plans. The College’s portion of the pension plans’ deficit or surplus is not recorded by the College. (f) Pledges Receivable Pledges receivable are not recorded as assets in these financial statements.
ANNUAL REPORT 2008-2009 27 (g) Capital Disclosures Effective July 1, 2008, the College adopted CICA 1535: Capital Disclosures. The new standard requires an entity to disclose information that enables users of its financial statements to evaluate the entity’s objectives, policies and processes for managing capital. The new note disclosure is as follows: The College defines its capital as the amounts included in deferred capital contributions (Note 9) and unrestricted net assets. A significant portion of the College’s capital is externally restricted. The College’s unrestricted capital is funded primarily by Alberta Advanced Education and Technology. The College has investment policies (Note 5), spending policies and cash management procedures to ensure the College can meet its capital obligations. Under the Post-Secondary Learning Act, the College must receive ministerial approval for a deficit budget, borrowing and for the sale of land and buildings. Note 3 Inventories Inventories consist of: 2009 2008 Livestock $ 379,415 $ 339,125 Bookstore 398,068 323,948 Firefighting agents 85,422 125,725 Fuels 60,805 78,294 Farm 146,064 81,632 Quip shop 2,417 3,232 $ 1,072,191 $ 951,956 Note 4 Cash and Cash Equivalents 2009 2008 Unrealized Unrealized Cost Gain (Loss) Market Cost Gain (Loss) Market Bank balance $ 5,758,093 $ - $ 5,758,093 $ 5,126,724 $ - $ 5,126,724 Money market investments 24,239,369 - 24,239,369 11,905,496 - 11,905,496 Endowment investment fund 2,518,490 119,228 2,637,718 2,045,406 551,682 2,597,088 32,515,952 119,228 32,635,180 19,077,626 551,682 19,629,308 Less non-current portion (4,677,718) (4,757,088) $27,957,462 $ 14,872,220 Non-current cash and investments are comprised of: 2009 2008 Endowments $ 2,637,718 $ 2,597,088 Long Term Debt 2,040,000 2,160,000 $ 4,677,718 $ 4,757,088 Included in cash and cash equivalents, the College is holding $6 million for capital projects and $3 million in apprenticeship access funds.
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LAKELAND COLLEGE Annual Repor t 2008 - 2009

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