L' Association des Francophones de Nanaimo

Notes to the Financial Statements For the year ended March 31, 2005

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Financial Instruments

The Association's financial instruments consist of short-term investments, accounts receivable, investments, bank indebtedness and accounts payable and accruals. Unless otherwise noted, it is management's opinion that the association is not exposed to significant interest, currency or credit risk arising from these financial instruments.

The carrying amount of short term investments, accounts receivable, bank indebtedness, and accounts payable and accruals approximates their fair value due to the short-term nature of these items.

The fair value of the Association's investments approximate the carrying amount since interest earned on the investments approximates current market rates. Gifts in kind

Contributed materials and services are recognized in the financial statements when their fair value can be reasonably determined and they are used in the normal course of the organization's operations and would otherwise have been purchased.

Capital assets

2005 2004 Office equipment 3,936 3,936 Computer equipment 23,432 20,874 Computer software 2,62% 2,629 Special event equipment 38,672 38,468 68,669 65,907

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Investments

The investment is a GIC bearing interest at 3% and matures November 1, 2006. The carrying amount of the investment approximates its market value. This investment is required by the Association's creditor as security for overdraft privileges. The Association intends to renew the investment at maturity.

Bank indebtedness

The Association has an approved line of credit of $60,000 bearing interest at the bank prime rate plus 1%, secured by the investment of $23,734.