Financial Statement EFIS Forms September 2010 Ministry of Education Training Sessions

1 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

2 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  Implemented tangible capital assets (TCA) as at September 1, 2009 as per PS  Included the impact of the capital wrap-up as at August 31,  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.

3 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 class b.Capitalization – what is capitalized c.Amortization – straight line over the useful life or lease term d.Land held for sale e.Building permanently removed from service f.Work of arts and historical assets

4 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

5 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

6 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

7 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

8 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

9 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.

10 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  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 financial statements.

11 Questions?

12 Further Information 1)Finance Officer As 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 YangElizabeth Sulkovsky Project ManagerSenior Business & Policy Analyst Soundari VigneshwaranPatrick PelletierBusiness Analyst