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VANCOUVER ART GALLERY ASSOCIATION
NOTES TO FINANCIAL STATEMENTS

Year ended June 30, 2014

PURPOSE OF THE ORGANIZATION Vancouver Foundation as described in note 10 and is not included
in these financial statements.
The Vancouver Art Gallery Association (the “Association”) is a (b) Basis of accounting
not-for-profit organization incorporated in April 1931 under the
Society Act (British Columbia). Its objectives are to establish and (i) Cash and cash equivalents:
maintain an art gallery for the perpetual benefit of the City of Cash and cash equivalents consist of cash and highly liquid
Vancouver and its citizens. It is a registered Canadian charity investments with terms to maturity of three months or less at
for Canadian income tax purposes. the date of acquisition.
(ii) Short-term investments:
1. SIGNIFICANT ACCOUNTING POLICIES
Short-term investments consist of highly liquid investments with
The financial statements have been prepared by management terms to maturity between three and twelve months at the date
in accordance with Canadian Accounting Standards for Not-For- of acquisition.
Profit Organizations in Part III of the CICA Handbook and include (iii) Prepaid expenses and exhibition costs:
the following significant accounting policies:
The balance is comprised primarily of exhibition expenditures
(a) Fund accounting that have been paid by the Association, which relate to exhibi-
tions to be held in subsequent years.
These financial statements include the undernoted funds which
are segregated for purposes of carrying on specific activities as (iv) Inventories:
described below. Inventories are comprised primarily of the following categories:
(i) The General Fund reflects the results of general operations (a) Books, jewellery, paper products, gifts, reproductions and
of the Association. clothing held-for-sale in the Gallery Store is stated at the lower of
(ii) The Acquisitions Fund was established in 1984 through funds cost and net realizable value. Cost is determined on a weighted
from the sale of the original Georgia Street building and receives average basis.
income earned by The Vancouver Art Gallery Endowment Fund (b) Owned artwork held-for-sale or rental in the Art Rental &
for Acquisitions of Art. The Association also receives income Sales Department, where the Association is the title holder and
from The Vancouver Art Gallery Foundation (the “Foundation”) ultimate beneficiary, is stated at the lower of cost and net real-
which has established several acquisition endowment funds izable value.
(note 11(a)). The purpose of the fund is to manage the funding Costs for inventories include all costs incurred in bringing inven-
and expenditures on the art collection (the “Collection”) of the tories to their present location and condition. Net realizable value
Vancouver Art Gallery.
is defined as the anticipated selling price less the costs to sell.
(iii) The Building Fund was established in 2008 for the express Any previous writedowns to net realizable value are reversed
purpose of accumulating, managing and distributing funds to when there is a subsequent increase in the value of inventories.
plan, develop and build a new Vancouver Art Gallery (note 7(c)).
(v) Revenue recognition:
(iv) The Operating Capital Fund was established in 2012 for the
purpose of accumulating and managing capital that is either The Association follows the deferral method of accounting for
raised through external contributions or internal funds and is contributions, which include donations, bequests and govern-
restricted expressly to be maintained for the purpose of meeting ment grants. Under this method of accounting, revenue received
future working capital or other contingency funding needs of the with specific external restrictions is deferred and recognized in
General Fund. Any funding provided by the Operating Capital the period the related expenses are incurred or the restrictions
Fund to the General Fund is recorded as an interfund balance are met. Government grant contributions provided for use towards
to be repaid to the Operating Capital Fund. Any contributions general operations are recognized on a straight-line basis over
received specifically for this fund are considered to be held on the period for which the grants are provided. Restricted capital
a permanent basis as they are not available other than for the contributions to be maintained as part of the Operating Capital
General Fund’s financing requirements. As a result, such con- Fund are recorded as direct increases in net assets.
tributions are recorded as a direct increase to net assets. The portions of membership fees and exhibition loan fees relat-
In addition, the Life Benefactors Endowment Fund was initially ing to future periods are deferred and amortized into revenue
established in 1989 and the income from the Fund is intended to over the period of membership or exhibition.
finance special projects as determined by the Board of Trustees. Gallery Store, Artist Editions and Art Rentals & Sales revenues
This fund is permanently restricted and administered by the are recognized at the time the sales and rentals are made.




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