AUDAIN ART MUSEUM

Year ended September 30, 2022

7. Art collection:

Art collection expense represents the cost of acquisitions and maintenance of artwork held by the Museum. The Museum’s art collection is comprised of original art work from Canadian artists. The Museum acquires artwork by purchase, gift and bequest. The cost of art acquisitions during the year ended September 30, 2022 totaled $1,531,049 (2021 - $707,316) and other expenses (including maintenance, insurance and appraisals) totaled $84,407 (2021 - $73,714).

8. Commitments:

The Museum is committed to minimum annual lease payments under various operating leases for equipment as follows:

9. Financial risks:

(a) Liquidity risk:

Liquidity risk is the risk that the Museum will be unable to fulfill its obligations on a timely basis or at a reasonable cost. The Museum manages its liquidity risk by monitoring its operating requirements. The Museum prepares budget and cash forecasts to ensure it has sufficient funds to fulfill its obligations

(b) Interest rate risk:

Fixed rate instruments are subject to fair value risk while floating rate instruments are subject to cash flow risk. The Museum has a revolving line of credit of $250,000 bearing interest at a rate of prime plus 1%. As at September 30, 2022, nil (2021 - nil) was drawn against this line of credit. The Museum’s short-term investment holding in a GIC at a fixed rate of interest (note 1 (a)) is subject to fair value risk.

(c) Industry:

The Museum operates in the cultural industry environment and can be affected by general economic trends. A decline in economic conditions, public consumer-spending levels or other adverse conditions could lead to reduced revenues and changes in operating results (note 1).

(d) Other:

In management’s opinion, the Museum is not exposed to significant currency exchange rate, credit or other price risks related to its financial instruments.

There were no significant changes to the risk exposures from 2021