Notes to the Consolidated Financial Statements Years ended November 3, 2012 and October 29, 2011 (in thousands of dollars) Calgary Co-operative Association Limited (the “Association”) is incorporated under the Cooperatives Act of Alberta. The primary business of the Association is operating retail food, pharmaceutical, petroleum, travel, home health care and liquor outlets in Calgary and area for the benefit of its members. As a percentage, 84 per cent (2011 – 86 per cent) of sales are to members.
1. First-time adoption of Canadian accounting standards for private enterprises On October 30, 2011, the Association adopted Canadian accounting standards for private enterprises (“ASPE”). These are the first financial statements prepared in accordance with ASPE. In accordance with the transitional provisions in ASPE, the Association has adopted the changes retrospectively, subject to certain exemptions allowed under these standards. The transition date is October 31, 2010 and all comparative information provided has been presented by applying ASPE. The Association has prepared the annual financial statements for the first time using the ASPE framework. The following outlines elections and changes on transition to ASPE: (a) Members’ shares Previously under Canadian Generally Accepted Accounting Principles, members’ shares were classified as long-term liabilities. Under ASPE, members’ shares are considered a component of equity. As a result, $162,193 of members’ shares was reclassified from long-term liabilities to equity on October 31, 2010, the date of transition ($166,885 – October 29, 2011). (b) Patronage returns Previously under Canadian Generally Accepted Accounting Principles, patronage returns to members were considered an expense in determining net earnings. Under ASPE, in connection with the reclassification of members’ shares from liability to equity, patronage returns are considered to be a distribution of retained earnings to members. The impact of this change was to reduce patronage returns by $30,000 for the year ended October 29, 2011 and to charge these amounts directly to retained earnings as a patronage distribution. There was no impact to opening retained earnings as at October 31, 2010.
(c) Business combinations The Association has elected to not apply the new ASPE standards for business combinations that closed prior to October 31, 2010.
2. Summary of accounting policies The preparation of financial statements in conformity with Canadian accounting standards for private enterprises requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include the valuation of accounts receivable, the carrying value of property and equipment and its estimated useful life, the valuation of inventory, valuation of goodwill and the valuation of future taxes. Actual results could differ from these estimates. (a) Basis of presentation The financial statements include the accounts of the Association and its proportionate share (50 per cent) of the assets, liabilities, sales and expenses of The Produce People (“TPP”). TPP is a joint venture between the Association and The Grocery People, a wholly-owned subsidiary of Federated Co-operatives Limited (“FCL”). (b) Definition of financial year The Association’s financial year ends on the Saturday closest to October 31. Accordingly, the year ended November 3, 2012 consists of 53 weeks of operations while the year ended, October 29, 2011 and October 31, 2010 consist of 52 weeks of operations. (c) Financial instruments Financial instruments are recorded at fair value on initial recognition. Freestanding derivative instruments that are not in a qualifying hedging relationship and equity instruments that are quoted in an active market are subsequently measured at fair value. All other financial instruments are subsequently recorded at amortized cost, unless management has elected to carry the instruments at fair value. The Association has not elected to carry any such financial instruments at fair value. Transaction costs incurred on the acquisition of financial instruments measured subsequently at fair value are expensed as incurred. All other financial instruments are adjusted by
Notes to the Consolidated Financial Statements
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