Note 2: Summary of significant accounting policies
The consolidated financial statements of the College have been prepared in accordance with Canadian generally accepted accounting principles and reflect the financial affairs of the College and its wholly controlled foundation, Ontario College of Teachers Foundation.
New accounting pronouncements
Effective January 1, 2008, the College adopted The Canadian Institute of Chartered Accountants (CICA) Handbook Section 1535, Capital Disclosures. This standard requires that an entity disclose information that enables users of its financial statements to evaluate an entity’s objectives, policies and processes for managing capital, including disclosures of any externally imposed capital requirements and the consequences of non-compliance. This standard impacts the College’s disclosures but will not affect the College’s results or consolidated financial position.
On October 2, 2008, the Accounting Standards Board (AcSB) announced that the application of the following standards was voluntary: Section 3862, Financial Instruments – Disclosures and Section 3863, Financial Instruments – Presentation. These standards enhance the disclosure and presentation of financial instruments and the College has chosen not to adopt these standards as the required disclosures would not provide additional useful information given the simplicity of the College’s financial instruments.
Deferred election costs
Council elections are normally held every three years. The cost of conducting these elections is deferred and amortized over the term of the elected Council.
Property and equipment
Property and equipment are recorded at cost and are amortized on a straight-line basis over their estimated useful lives, as follows:
| Computer equipment | 33-1/3% per annum |
| Furniture and office equipment | 10% per annum |
| Leasehold improvements | over the remaining term of the lease |
The College assesses all long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the net carrying amount of an asset exceeds the net recoverable amount.
Deferred capital contribution
Financial contributions received by the College from third parties for property and equipment purchases are deferred and recognized in revenue on the same basis as the amortization of the property and equipment acquired.
Deferred lease inducements
The College amortizes lease inducements over the term of the lease and nets the amortization against rent expense.
Financial instruments
The College utilizes various financial instruments. Unless otherwise noted, it is management’s opinion that the College is not exposed to significant interest, currency or credits risks arising from these financial instruments.
Cash and investments are classified as held-for-trading and are recorded at fair value. Accounts receivable are classified as loans and receivables and accounts payable and accrued liabilities are classified as other financial liabilities, which are both recorded at cost.
Income taxes
As a not-for-profit professional membership organization, the College is not liable for income taxes.
Use of estimates
The preparation of consolidated financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenue and expenses during the reporting period. For all estimates, actual results could differ from those estimates.