Annual Report 2009 - Asian Productivity Organization

ASIAN PRODUCTIVITY ORGANIZATION
NOTES TO FINANCIAL STATEMENTS
1. Organization, business, and source of funding
The Asian Productivity Organization (the “Organization” or “APO”) is an intergovernmental regional
organization established in 1961 by several governments in Asia with its headquarters in Tokyo, Japan,
and continues to operate from this location. The Organization is nonpolitical, nonprofit making, and
nondiscriminatory.
The objective of the Organization is to increase productivity and thereby accelerate economic development
in Asia through mutual cooperation among member countries. To fulfill its objective, the Organization
institutes programs for the development of productivity, provides information and advice for
productivity improvement, and promotes and disseminates modern productivity skills and techniques in
the agriculture, industry, and service sectors.
The Organization membership is open to all Asian and Pacific governments that are members of the
Economic and Social Commission for Asia and the Pacific of the United Nations. From 1 July 1997,
the Hong Kong Productivity Council was instructed to cease all APO activities when sovereignty was
transferred to the People’s Republic of China.
The Organization performs activities in cooperation with national productivity organizations (NPOs)
and other international organizations. NPOs in member countries that deal with productivity activities
at the national level act as implementing agencies for the Organization’s projects and nominate participants
from their countries to attend those projects.
The budget of the Organization is composed of the budget covering the program of action of the
Organization and staff, administrative, and nonproject expenses. The Governing Body, which is the
supreme organ of the Organization, meets once a year to decide on policy matters concerning program
and budget, finances, and membership. The sources of revenue for the budget are:
(a) Annual membership contributions based on gross national income/gross domestic product;
(b) Special cash grants given by member governments and external assistance from cooperating agencies
and institutions;
(c) Project implementation grants given by member governments that host projects and other governments
and organizations that organize projects jointly with the Organization; and
(d) Miscellaneous income such as proceeds from interest income and the sale of publications.
2. Significant accounting policies
(1) Basis of preparation of accompanying financial statements
The financial statements of the Organization are prepared based on the Convention and the Financial
Regulations established by the APO, which is in line with International Financial Reporting
Standards.
(2) Allowance for long-outstanding debts
The Organization uses the “aging the accounts” method as the estimation technique of the net
realizable value of receivables. Although the Organization believes that the allowance is adequate
to provide for losses that are inherent in the year-end accounts receivable balance, actual results
could differ from those estimates.
FINANCIAL REPORT
APO ANNUAL REPORT 2009 109