Page 80 - Vancouver Art Gallery 2014
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Interior_Annual Report 14-10-24 4:52 PM Page 78








VANCOUVER ART GALLERY ASSOCIATION
NOTES TO FINANCIAL STATEMENTS

Year ended June 30, 2014

Unrestricted contributions are recognized as revenue when of which is not reflected in these financial statements given the
received or receivable if the amount to be received can be rea- difficulty of determining the fair value.
sonably estimated and collection is reasonably assured.
(xi) Financial instruments:
Pledged amounts are recorded as revenue when the amount to Financial instruments are recorded at fair value on initial recog-
be received can be reasonably estimated, typically when signed
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
quoted in an active market are subsequently measured at fair
Revenue and expenses related to fundraising and other special value. All other financial instruments are subsequently recorded
events, where the Association is the principal to the events, are
recorded on a gross basis. at cost or amortized cost, unless management has elected to
carry the instruments at fair value. The Association has not
(vi) Capital assets:
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 appropriate. action costs incurred on acquisition and financing costs, which
Repairs and maintenance costs are charged to expense. Better-
ments which extend the estimated life of an asset are capitalized. are amortized using the straight-line method.
When a capital asset no longer contributes to the Association’s Financial assets carried at cost or amortized cost are assessed
ability to provide services, its carrying amount is written down for impairment on an annual basis at the end of the fiscal year
to its residual value. if there are indicators of impairment. If there is an indicator of
Capital assets are amortized on a straight-line basis over the impairment, the Association determines if there is a significant
useful lives of the assets as follows: adverse change in the expected amount or timing of future cash
flows from the financial asset. If there is a significant adverse
Asset Rate change in the expected cash flows, the carrying value of the
financial asset is reduced to the highest of the present value of
Computers 3–5 years the expected cash flows, the amount that could be realized from
Equipment 3–20 years
Furniture and building fixtures 5–25 years selling the financial asset or the amount the Association expects
Equipment under capital lease 4–6 years to realize by exercising its right to any collateral. If events and
circumstances reverse in a future period, an impairment loss
will be reversed to the extent of the improvement, not exceeding
(vii) Foreign currency translation:
the initial carrying value.
Transactions denominated in a foreign currency are translated
to Canadian dollars at the rate of exchange in effect at the time (xii) Use of estimates:
of the translation. Monetary assets and liabilities denominated in The preparation of financial statements requires management
foreign currencies have been translated at the rate of exchange to make estimates and assumptions that affect the reported
in effect at year end. Exchange adjustments are included in deter- amounts of assets and liabilities and disclosure of contingent
mining earnings in the year in which they occur. assets and liabilities at the date of the financial statements
(viii) Pension plan: and the reported amounts of revenue and expenses during
the year. Significant items requiring the use of management
The Association maintains a defined contribution plan for its
employees. Pension plan costs for the employees of the Associa- estimates include the determination of useful lives of capital
tion are funded annually and are charged to operating expenses. assets for purposes of amortization, valuation of inventories,
These costs totaled $155,230 for the year ended June 30, 2014 allowance for doubtful accounts related to accounts and pledges
(2013 – $145,800). receivable, and provisions, if any, for contingencies. Actual results
may differ from these estimates.
(ix) Collection:
The costs of additions to the Collection are charged as an expense 2. PLEDGES RECEIVABLE
in the Acquisitions Fund in the year of acquisition.
(x) Donated works of art, materials and services: Included in grants, pledges, interest and accounts receivable
The Association receives donated works of art, materials and are pledges receivable of $1,402,432 (2013– $1,10 0,000) net of
services, including services from governance members, the value $20,000 (2013–$63,000) in provision for impairment.




78 VANCOUVER ART GALLERY ASSOCIATION
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