2009-10 Financial StatementEFIS Forms

September 2010Ministry of EducationTraining Sessions

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Part F – Notes to the Financial Statement

Note 1: Significant accounting policies - Updated

Note 2: Change in accounting policy - Updated

Note 4: Accounts receivable – Government of Ontario - New

Note 12: Tangible Capital Assets – Updated

Note 13: Accumulated Surplus - New

Note 17: Budget data - Updated

Note 18: Partnership in Transportation Consortium - New

Note 19: Accounting for Contributions Used for Capital - New

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Overview Due to some significant accounting changes, the Ministry proposes

changes to notes to the financial statements. Major changes include:

Moved funds and reserves to accumulated surplus as at September 1, 2009 as per PS-1200.

Implemented tangible capital assets (TCA) as at September 1, 2009 as per PS-3150.

Included the impact of the capital wrap-up as at August 31, 2010.

A draft notes was shared with boards. This slide deck is based on the draft notes.

Feedback is welcome, and will be incorporated in the final version, to be available after the training sessions.

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Note 1 - Significant Accounting Policies

Investments are broken down into temporary and long-term investments

Temporary investment - maturities between 90 days and one year

Long-term investments - maturities more than one year Tangible Capital Assets (TCA) Three notes (note 1, note 2 and note 12) disclose TCA Note 1 discloses general TCA accounting policy – every year Note 2 discloses the impact of first time TCA reporting – only for this year Note 12 discloses actual TCA information – every year Accounting policy disclosed:

a. Asset classb. Capitalization – what is capitalizedc. Amortization – straight line over the useful life or lease termd. Land held for salee. Building permanently removed from servicef. Work of arts and historical assets

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Note 2 - Change in Accounting Policy

First year full implementation of: Section 1200 Financial Statement Presentation Section 3150 Tangible Capital Assets

Focus on implementation of section 3150

The approach to establish the opening balance Historical cost – if available If not available then a) Building/Land – by the Ministry through BVC b) Other classes – estimated by the boards

The impact on the statement of financial position and statement of financial activities Restatement of Accumulated Surplus – Add the Net Book Value of TCA Restatement of Annual Surplus/Deficit – Add capital expenditures

previously expensed, gain on disposal that is not subject to restriction, less amortization expense, loss on disposal

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Note 4 – Accounts Receivable – Government of Ontario

New note this year

The province changed the funding policy for capital

Variable funding is replaced with a one-time debt support grant and long-term accounts receivable

Cash payment will be over the remaining term of the existing capital debt instruments.

Disclose the total account receivable amount as at August 31, 2010

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Note 12 – Tangible Capital Assets

Opening balances, in year change (additions, amortization, adjustment and disposals) and ending balances are disclosed

Also discloses:

Amounts of assets under construction Amounts of write down Amounts of asset permanently removed from service

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Note 13 – Accumulated Surplus

New note this year

Disclose components of accumulated surplus

Invested in tangible capital assets Restricted for future use by board motion Other

Boards may also disclose detail of the amount restricted by board motion

Sick leave Employee benefit Retirement Gratuities Amounts restricted for future use on capital expenditures

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Note 18 – Budget data

TCA was not included in the original budget

Statement of operation is restated in order to reflect the same basis of accounting in budget and actual

a. Where amounts were budgeted, i.e. the pupil accommodation expenditure and capital expenditure for land and building, use the budgeted amount

b. Where the amount were not budgeted, use actual amount

Statement of Change in Net Debt is not restated because this is a new statement and boards did not prepare it in the budget

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Note 19 – Partnership in Transportation Consortium

New note this year Two kinds of transportation consortium - Full Partner in a Separate Legal Entity - Full Partner in a Consortium Agreement Similarities: Proportionate consolidation approach Disclose asset, liabilities, accumulated surplus/deficit, revenues and expenses,

annual surplus/deficit Differences: Full Partner in a Separate Legal Entity

a. Pro-rata share of assets, liabilities, revenues and expenses of the consortium

b. Inter-organizational transactions and balances have been eliminated. Partner in a Consortium Agreement

a. Assets that it controls,b. Liabilities that it has incurred, c. Pro-rata share of revenues and expenses.

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Note 20 – Accounting for Contributions Used for Capital

New note this year To disclose the forthcoming government direction on accounting treatment

on capital contribution starting 2010-11 School boards are required to adopt the policy to recognize government

transfers and external contributions used in the acquisition of TCA over useful life of the asset

Purpose of the policy Ensure consistency with current practice of senior governments in Canada

and other major broader public-sector organizations (hospitals, colleges and universities),

Ensure that school board operating surpluses or deficits are not distorted by capital grant revenues.

PSAB Compliance Not currently a recognized option by the Public Sector Accounting Standards

Board (PSAB) Do not need to be implemented in 2009-10 financial statements.

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Questions?

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Further Information

1) Finance OfficerAs a first point of contact, please direct queries to your finance officer, who will coordinate with the Reporting Entity Team to resolve your query.

2) Reporting Entity Team

Andrew Yang Elizabeth Sulkovsky

Project Manager Senior Business & Policy Analyst

416-325-4212 416-325-8527

Andrew.Yang@ontario.ca Elizabeth.Sulkovsky@ontario.ca

Soundari Vigneshwaran Patrick Pelletier

Business Analyst Business Analyst

416-326-9168 416-325-2058

Soundari.Vigneshwaran@ontario.ca Patrick.Pelletier@ontario.ca