The Society of Management Accountants of Manitoba

Transcription

1 Consolidated Financial Statements For the Year Ended March 31, 2015 Contents Auditor's Report 2 Financial Statements Consolidated Statement of Financial Position 3 Consolidated Statement of Changes in Net Assets 4 Consolidated Statement of Operations 5 Consolidated Statement of Cash Flows 6 Notes to Consolidated Financial Statements 7-12

2 Del Halliday Certified Management Accountant Inc. Del Halliday, CMA Tom Tasker, CA Portage Avenue Telephone (204) Winnipeg MB R3G 0R4 Fax (204) INDEPENDENT AUDITOR S REPORT To the Members of The Society of Management Accountants of Manitoba I have audited the accompanying financial statements of The Society of Management Accountants of Manitoba, which comprise the consolidated statement of financial position as at March 31, 2015 and the consolidated statement of operations, consolidated statement of changes in net assets and consolidated statement of cash flows for the year ended March 31, 2015, and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Society s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Society s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the consolidated financial statements present fairly, in all material respects, the financial position of The Society of Management Accountants of Manitoba as at March 31, 2015, and the results of its operations and its cash flows for the year ended March 31, 2015 in accordance with Canadian Accounting Standards for Not-for-Profit Organizations. Winnipeg, Manitoba May 28, 2015 Certified Management Accountant

3 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at March 31, 2015 Assets March 31, 2015 March 31, 2014 Current Cash and Cash Equivalents $ 498,587 $ 435,103 Accounts Receivable and Accrued Interest 376, ,701 Prepaid Expenses 18,130 44,568 Investments Maturing within 12 Months - Note 4 100, , ,679 1,055,613 Long-term Investments - Note 4 542, ,580 Capital Assets - Note 5 325, ,744 $ 1,861,585 $ 1,908,937 Liabilities and Members' Equity Current Liabilities Accounts Payable $ 191,892 $ 239,435 Deferred Revenue 293, , , ,975 Deferred lease inducements - Note 2 196, ,249 Net Assets Unrestricted 1,049, ,020 Invested in Capital Assets 129, ,693 1,179,144 1,102,713 $ 1,861,585 $ 1,908,937 Approved by the Board: Julie Guevarra, CMA President Ronald Stoesz, CMA, FCMA Treasurer 3

4 CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS For the Year Ended March 31, 2015 Invested in Capital Assets Unrestricted 2015 Total 2014 Total Balance, beginning of year $ 320,693 $ 782,020 $ 1,102,713 $ 955,294 Excess of revenue over expense 76,431 76, ,419 Amortization (22,658) 22, Investment in capital assets (168,579) 168, Balance, end of year $ 129,456 $ 1,049,688 $ 1,179,144 $ 1,102,713 4

5 CONSOLIDATED STATEMENT OF OPERATIONS For the Year Ended March 31, 2015 Revenue Member Dues $ 1,352,326 $ 1,118,398 Less: National Assessment 505, ,538 Net Member Dues 846, ,860 Pre-certification (Legacy & PREP) 1,225, ,630 Member Education and Events 219, ,711 Public Practice Assessments 105,856 89,968 Investment and Other Income 61,624 88,606 2,459,773 1,367,775 Expense Salaries and Benefits 849, ,489 Pre-certification (Legacy & PREP) 659, ,910 Member education, events, & services 216, ,039 External Communications & Student Recruitment 208, ,742 Office Occupancy & Operations 260, ,467 Regulatory 42,946 34,299 Governance 101,702 68,006 Amortization 44,581 57,404 2,383,342 1,220,356 Excess of revenue over expense $ 76,431 $ 147,419 5

6 CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended March 31, 2015 Operating Activities Excess of revenue over expense for the year $ 76,431 $ 147,418 Amortization 44,581 57, , ,822 Decrease in non-cash working capital components (395,553) (457,785) Cash Generated From Operations (274,541) (252,963) Investing Activities Cash from matured (purchase of) investments 169,446 15,848 Purchase of capital assets 168,579 (339,018) Total Cash Generated (Expended) for Investing Activities 338,025 (323,170) Increase (Decrease) in cash 63,484 (576,133) Cash and cash equivalents - beginning of period 435,103 1,011,236 Cash and Cash Equivalents - End of Period $ 498,587 $ 435,103 Cash and Cash Equivalents Cash 498, ,103 $ 498,587 $ 435,103 6

7 Note 1 The Society of Management Accountants of Manitoba NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2015 Nature of Organization The Society is a non-profit, professional organization, incorporated pursuant to the Society of Industrial and Cost Accountants Act which received Royal Assent in the Province of Manitoba April 26, The Society continues under the Certified Management Accountants Act (December 1, 2004). It is a non-share capital corporation with voting privileges restricted to its members as defined in the Society s By-Laws. Mission: CMA drives value creation by developing professionals and resources to lead the advancement and integration of strategy, accounting and management. Note 2 Summary of Significant Accounting Policies The preparation of consolidated financial statements in conformity 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, as well as the reported amounts of revenue and expenses during the financial period. Actual results may differ from those estimates. a) Interest in CPA Manitoba Joint Venture: The Society accounts for its interest in the CPA Manitoba Joint Venture using the proportionate consolidation method. The Society's consolidated financial statements include its pro rata share of CPA Manitoba Joint Venture's assets, liabilities, revenues, expenses, and cash flows from operating, investing and financing activities. b) c) Cash & Cash Equivalents: Cash is carried at cost, which approximates market value and is held at the TD Bank. Capital Assets: Capital assets are recorded at cost. Assets having a cost less than $1,000 are expensed in the year of purchase. Amortization is provided for on a straight line basis with no salvage value as follows: Office Furniture and Equipment 5 and10 years Signs Building Improvements 10 years 10 years Leasehold Improvements Over the life of the lease Computer Hardware 3 years Computer Software 1 year d) e) Deferred lease inducements: Lease inducements are amortized on a straight line basis over the life of the lease. Revenue Recognition: Membership fees are reported as earned revenue in the year to which the fees apply. All fees collected prior to year-end are reported in the consolidated financial statements as deferred revenue. Education and Accreditation revenue as well as Member Development and Support program revenue are recognized when the service is provided or the event is held. Investment income consists of interest income received plus accrued interest earned from the anniversary date to the year-end. 7

8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2015 Note 2 Summary of Significant Accounting Policies (continued) f) Financial Instruments: Financial instruments include cash and cash equivalents, long-term investments, accounts receivable and accrued interest, accounts payable, as well as accrued liabilities. Unless otherwise stated, it is management's opinion that the Society is not exposed to significant interest, currency, or credit risks arising from these financial instruments. The book value of the Society's financial assets and liabilities approximates their fair value. The fair value of long-term investments is disclosed as follows: March 31, 2015 March 31, 2014 Bonds $ 151,071 $ 333,459 GICs 496, ,896 $ 647,723 $ 823,355 The Society manages its exposure to the risks associated with financial instruments through governance policies regarding members' equity positions and long-term investment guidelines. Specifically, the Society invests in long-term funds of fixed income securities that have a rating of AA (mid) or higher from at least two nationally recognized rating agencies. g) Capital Disclosures: The Society's capital consists of its net assets invested in capital assets and unrestricted net assets. These amounts are disclosed in the Consolidated Statement of Changes in Net Assets. The objective is to ensure resources are available to continue to support our members. The Society has established a recommended Members' Equity balance of at least 50% of the current member and student fees collected by the Society. h) Donated Services: The work of the Society is dependant on the voluntary service of many members. Due to the difficulty in determining the fair value of donated services, these are not stated on the consolidated financial statements. 8

9 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2015 Note 3 CPA Manitoba Joint Venture The Society along with the Institute of Chartered Accountants of Manitoba (Institute) and the Certified General Accountants Association of Manitoba (CGA Manitoba) are working towards the creation of a united accounting body in Manitoba aligned with the Chartered Professional Accountants of Canada which was established on January 1, Formation of the new accounting body, Chartered Professional Accountants of Manitoba (CPA Manitoba) is to be established by legislation. On April 1, 2014, an updated Joint Venture Agreement was signed by the Society, the Institute and CGA Manitoba to form an unincorporated joint venture, CPA Manitoba Joint Venture. The Society's proportionate share of the CPA Manitoba Joint Venture s assets, liabilities, revenue, expenses, excess revenue and cash flows from operating, investing and financing activities is determined as the total number of certified management accountant members of the Society divided by the sum of the total number of chartered accountant members of the Institute, the total number of certified management accountant members of CMA Manitoba and the total number of certified general accountant members of CGA Manitoba as at the effective date. The Society's share as at April 1, 2014 (the effective date) was 25.4%. Prior to April 1, 2014, a two-way joint venture agreement with the Institute had been in place. The Society's share as at July 1, 2013 (the effective date) was 37%. The proportionate allocation is to be recalculated each April 1 until the Joint Venture Agreement ceases. The Joint Venture will cease upon the proclamation of the new legislation forming CPA Manitoba. 9

10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2015 Note 4 Long-term Investments Province of ON Bond $ - $ 150,132 (Maturity: Sept 8, 2014, Net Yield 3.25%) Pacific and Western Bank GIC - 68,321 (Maturity: Dec 1, 2014, Net Yield 3.3%) Canadian Western Bank GIC - 65,788 (Maturity: Dec 1, 2014, Net Yield 3.2%) Province of MB Bond - 175,000 (Maturity: June 15, 2015, Net Yield 3.15%) HSBC Bank of Canada GIC 100, ,000 (Maturity: February 8, 2016, Net Yield 2.4%) (Market Value: 100,342) National Bank Trust 100, ,000 (Maturity: February 6, 2017, Net Yield 2.75%) (Market Value: 100,399) Manulife Bank 52,580 52,580 (Maturity: February 8, 2018, Net Yield 2.45%) (Market Value: 52,760) National Bank of Canada Trust 51,325 50,000 (Maturity: December 3, 2018, Net Yield 2.65%) (Market Value: 51,765) Canadian Tire Bank GIC 51,325 50,000 (Maturity: December 4, 2018, Net Yield 2.65%) (Market Value: 51,761) Veresen Bond 148,669 - (Maturity: June 13, 2019, Net Yield 2.769%) (Market Value: 151,071) National Bank GIC 88,000 - (Maturity: December 3, 2019, Net Yield 2.57%) (Market Value: 88,731) Scotia Bank GIC 50,480 - (Maturity: December 4, 2019, Net Yield 2.56%) (Market Value: 50,894) 642, ,821 Less investments maturing within 12 months 100, ,241 Total Long-term Investments $ 542,379 $ 527,580 10

11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2015 Note 5 Capital Assets Cost Accumulated Net Book Cost Accumulated Net Book Amortization Value Amortization Value Office Furniture & Equipment $ 90,778 $ 14,638 $ 76,140 $ 86,285 $ 2,838 $ 83,447 Computer Hardware 43,241 28,368 14,873 38,968 20,376 18,592 Computer Software 56,064 56,064-56,064 56,064 - Leasehold Improvements 247,793 20, , ,608 3, ,705 Building Improvements 5, , Signs 2, , Total $ 445,689 $ 120,162 $ 325,527 $ 408,925 $ 83,181 $ 325,744 Note 6 Commitments Rental Commitment On April 10, 2013, the Society, along with CA Manitoba, signed a new agreement for office space at Suite 1675, One Lombard effective January 1, 2014 for a fifteen-year period expiring December 31, The minimum rent commitment is $116,124 annually for years 1 through 5; $135,478 annually for years 6 through 10, and; $154,832 annually until the expiry of the lease in Educational Institution Grant Commitments The Society has entered into an agreement during fiscal 2009/2010 to provide $250,000 to the University of Winnipeg Foundation. These funds will be applied to the capital cost of construction of the University s new Faculty of Business and Economics, and to the funding of CMA tuition scholarships. The contribution will be made in annual payments of $25,000 for ten (10) years $24,000 per annum towards the 460 Portage Project and $1,000 per annum for student awards. The Society also has an agreement, to provide $25,000 payments annually to the University of Manitoba with the purpose of supporting activities that will directly advance CMA Manitoba student enrollment. Photocopier Commitment The Society entered into a new lease agreement on November 17, 2010 for a colour photocopier. The lease contract calls for 22 quarterly payments of $2, The annual commitment for the duration on the lease term is $9,

12 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2015 Note 7 Certified Management Accountants of Manitoba Foundation Inc. On November 30, 2010, the Certified Management Accountants of Manitoba Foundation Inc. was established with a purpose to support the advancement of post-secondary education within the Province of Manitoba, including, but not limited to, the provision of grants to post-secondary educational institutions within Manitoba and of scholarships, bursaries, and other benefits directly or indirectly to students and candidates at post-secondary institutions. The Foundation is a registered charitable organization under the Income Tax Act of Canada. Note 8 Merger Events Merger of Accounting Bodies The three accounting bodies in Manitoba have been working with the Government of Manitoba in drafting legislation which would amalgamate the Institute, CGA Manitoba and CMA Manitoba into the Chartered Professional Accountants of Manitoba (CPA Manitoba). On December 1, 2014, Bill 9 The Chartered Professional Accountants Act received First Reading in the Manitoba Legislature. The Bill received Second Reading on May 28, The Manitoba Government has indicated its intention to deal with the Bill as expeditiously as possible. It is expected that the Bill will receive passage during the Spring Session and will be proclaimed sometime during the year At that time, CPA Manitoba will be formed. As well the Society of Management Accountants of Manitoba would cease to exist as The Certified Management Accountants Act will be repealed at that time. All of the assets and liabilities of CMA together with all of the assets and liabilities of CGA and the Institute will be merged into the assets of CPA Manitoba once Bill 9 is proclaimed. Merger of Accounting Foundations Similar to the amalgamation of the three accounting bodies, the CA and CMA Foundations and the CGA Scholarship Trust Fund are seeking to merge the two Foundations and the Scholarship Trust Fund into a new body to be known as the CPA Manitoba Foundation. The CMA Foundation and CA Foundation and the CGA Scholarship Trust Fund are controlled by their respective accounting bodies. Regional Education The CPA Manitoba Joint Venture is in the process of developing an Education Agreement to replace the existing Education Agreement between the CA provincial accounting bodies in British Columbia, Alberta, Saskatchewan and Manitoba and the CA School of Business. The new Education Agreement will be between the new CPA provincial accounting bodies and the regional school regarding the effective delivery of professional accounting education for those aspiring to become Chartered Professional Accountants. The CA School of Business is seeking to change its name to the CPA Western School of Business. Delivery of the CMA Strategic Leadership Program has now been completed with the final sessions being held in March The candidates will be presenting their team Board Reports in June Those candidates who are not successful will have a final opportunity in the fall of 2015 to successfully complete the program. CMA candidates who do not successfully complete the Strategic Leadership Program will be provided a transition opportunity into the CPA programs. 12