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Interior_Annual Report 13-10-30 4:32 PM Page 74


Years ended June 30, 2013 and 2012

Any previous writedowns to net realizable value are reversed (vii) Foreign currency translation:
when there is a subsequent increase in the value of inventories. Transactions denominated in a foreign currency are translated
(v) Revenue recognition: to Canadian dollars at the rate of exchange in effect at the time
of the translation. Monetary assets and liabilities denominated in
The Association follows the deferral method of accounting for
contributions, which include donations, bequests and govern- foreign currencies have been translated at the rate of exchange
ment grants. Under this method of accounting, revenue received in effect at year end. Exchange adjustments are included in deter-
with specific external restrictions is deferred and recognized in mining earnings in the year in which they occur.
the period the related expenses are incurred or the restrictions (viii) Pension plan:
are met. Government grant contributions provided for use towards The Association maintains a defined contribution plan for its em-
general operations are recognized on a straight-line basis over ployees. Pension plan costs for the employees of the Associa-
the period for which the grants are provided. Restricted capital tion are funded annually and are charged to operating expenses.
contributions to be maintained as part of the Operating Capital These costs totaled $145,800 for the year ended June 30, 2013
Fund are recorded as direct increases in net assets. (2012 – $147,239).
The portions of membership fees and exhibition loan fees relat- (ix) Collection:
ing to future periods are deferred and amortized into revenue The costs of additions to the Collection are charged as an expense
over the period of membership or exhibition. in the Acquisitions Fund in the year of acquisition.
Gallery Store, Artist Editions and Art Rentals & Sales revenues (x) Donated works of art, materials and services:
are recognized at the time the sales and rentals are made.
The Association receives donated works of art, materials and
Unrestricted contributions are recognized as revenue when services, including services from governance members, the value
received or receivable if the amount to be received can be rea- of which is not reflected in these financial statements given the
sonably estimated and collection is reasonably assured. difficulty of determining the fair value.
Pledged amounts are recorded as revenue when the amount to (xi) Financial instruments:
be received can be reasonably estimated, typically when signed Financial instruments are recorded at fair value on initial recog-
pledge forms are received, and ultimate collection is reasonably nition. Freestanding derivative instruments that are not in a
assured. qualifying hedging relationship and equity instruments that are
Revenues and expenses related to fundraising and other special quoted in an active market are subsequently measured at fair
events where the Association is the principal to the events are value. All other financial instruments are subsequently recorded
recorded on a gross basis. at cost or amortized cost, unless management has elected to
(vi) Capital assets: carry the instruments at fair value. The Association has not
elected to carry any such financial instruments at fair value.
Purchased capital assets are recorded at cost. Contributed capi- Transaction costs incurred on the acquisition of financial instru-
tal assets are recorded at fair value at the date of contribution. ments measured subsequently at fair value are expensed as
Assets acquired under capital leases are amortized over the incurred. All other financial instruments are adjusted by trans-
estimated life of the assets or over the lease term, as appro- action costs incurred on acquisition and financing costs, which
priate. Repairs and maintenance costs are charged to expense. are amortized using the straight-line method.
Betterments which extend the estimated life of an asset are Financial assets are assessed for impairment on an annual basis
capitalized. When a capital asset no longer contributes to the at the end of the fiscal year if there are indicators of impairment.
Association's ability to provide services, its carrying amount is If there is an indicator of impairment, the Association determines
written down to its residual value.
if there is a significant adverse change in the expected amount
Capital assets are amortized on a straight-line basis over the or timing of future cash flows from the financial asset. If there
useful lives of the assets as follows: is a significant adverse change in the expected cash flows, the
carrying value of the financial asset is reduced to the highest of
Asset Rate the present value of the expected cash flows, the amount that
could be realized from selling the financial asset or the amount
Computers 3–5 years
Equipment 3–20 years the Association expects to realize by exercising its right to any
collateral. If events and circumstances reverse in a future period,
Furniture and building fixtures 5–25 years an impairment loss will be reversed to the extent of the improve-
Equipment under capital lease 5–15 years
ment, not exceeding the initial carrying value.

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