Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32AUDITED FINANCIAL STATEMENTS Ontario Electronic Stewardship Notes to Financial Statements December 31, 2015 1. Significant Accounting Policies (Continued) (d) Financial Instruments Investments are measured at their fair value. Realized and unrealized gains (losses) are recorded in the statement of operations. The Organization accounts for its investments on a settlement date basis and transaction costs associated with investment activities are included in the statement of operations. Unless otherwise noted, the Organization initially measures its financial assets and liabilities at fair value and subsequently measures its financial assets and liabilities at amortized cost. (e) Capital Assets Property, plant and equipment are recorded at cost less accumulated amortization and are amortized on the following basis: Computer equipment - 3 years straight line Motor vehicles - 5 years straight line Office equipment - 5 years straight line Containers - 10 years straight line Leasehold improvements - straight line over the term of the the lease Intangible assets with finite lives are recorded at cost and are amortized over their useful lives, beginning once the asset is ready for use. The computer software is being amortized on a straight line basis over 3 years. (f) Impairment of Long-Lived Assets When a long-lived asset no longer has any long-term service potential to the Organization, the excess of its net carrying amount over any residual value is recognized as an expense in the statement of operations. (g) Use of Estimates The preparation of financial statements in accordance with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates include accrued material management costs. Actual results could differ from management's best estimates as additional information becomes available in the future. Ontario Electronic Stewardship 2015 Annual Report 27