L'Association Des Francophones De Nanaimo

Notes to the Financial Statements
For the year ended March 31, 2010
(Unaudited)

Significant accounting policies (Continued from previous page)

Loans and receivables are subsequently measured at their amortized cost using the effective interest method. Under this
method, estimated future cash receipts are exactly discounted over the asset’s expected life, or other appropriate period, to
its net carrying value. Amortized cost is the amount at which the financial asset is measured at initial recognition less
principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference
between that initial amount and the maturity amount, and less any reduction for impairment or uncollectability. Gains and
losses arising from changes in fair value are recognized in excess (deficiency) of revenues over expenses upon
derecognition or impairment.

Other financial liabilities:

The Association has classified accounts payable and accruals as other financial liabilities. These liabilities are initially
recognized at their fair value. Fair value is approximated by the instrument's initial cost in a transaction between unrelated
parties. Transactions to purchase or sell these items are recorded on the trade date.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Under this
method, estimated future cash payments are exactly discounted over the liability’s expected life, or other appropriate period,
to its net carrying value. Amortized cost is the amount at which the financial liability is measured at initial recognition less
principal repayments, and plus or minus the cumulative amortization using the effective interest method of any difference
between that initial amount and the maturity amount. Gains and losses arising from changes in fair value are recognized in
excess (deficiency) of revenues over expenses upon derecognition or impairment.

Financial asset impairment ‘

The Association assesses impairment of all its financial assets, except those classified as held for trading, impairment is
measured as the difference between the asset's carrying value and its fair value. Any impairment, which is not considered
temporary, is included in current year excess (deficiency) of revenues over expenses.

Short term investment

The short term investment is a term deposit bearing interest at 1.07% (2009 - 2.05%) and matures January 30, 2011.

Inventory

Inventory includes contributed inventory with a carrying value of $5,719 (2009 - $10,228).

Capital assets

2010 2009

Accumulated Net book Net book

Cost amortization value value

Computer equipment 11,137 11,086 51 1,050

Computer software 2,629 2,629 - -

Equipment 49,639 44,412 5,227 9,129
Furniture and fixtures 11,066 5,518 5,548 7,066
Small Tools 993 676 317 516
75,464 64,321 11,143 17,761