5 NORTHERN COLLEGE OF APPLIED ARTS AND TECHNOLOGY Notes to Financial Statements Years ended March 31, 2013 and March 31, 2012 Northern College of Applied Arts and Technol ogy (the “College”) is an Ontario College established as a Community College under The Departm ent of Education Act of the Province of Ontario. The College is a registered charity and is exempt from income taxes under the Income Tax Ac t. On April 1, 2012, the College adopted Canadian public sector accounting standards. The College has also elected to apply the 4200 standards for government not-for-profit organizations. These are the first financial statements prepar ed in accordance with these public sector accounting standards. In accordance with the transitional provisions in Canadian public sector accounting standards, the College has adopted the changes retrospectively , subject to certain exemptions allowed under these standards. The transition date is April 1, 2011 and all comparative information provided has been presented by applying Canadi an public sector accounting standards. A summary of transitional adjustments recorded to net assets and excess (deficiency) of revenue over expenditures is provided in note 2. 1. Significant accounting policies: (a) Basis of presentation: These financial statements reflect the assets , liabilities, revenues and expenses of the unrestricted capital and restricted and endowed f unds of Northern College of Applied Arts and Technology. The financial statements have been prepared by management in accordance with Canadian public sector accounting st andards including the 4200 standards for government not-for-profit organizations. (b) Revenue recognition: The College accounts for contributions under the deferral method of accounting as follows : Operating grants are recorded as revenue in the period to which they relate. Grant amounts relating to future periods are deferred and recognized in the subsequent period when the related activity occurs . Grants approved but not received are accrued. Unrestricted contributions are recognized as revenue when received or receivable if the amounts can be reasonably estimated and collection is reasonably assured. Externally restricted contributions, other than endowment contributions, are recognized as revenue in the period in whic h the related expenses are recognized. Contributions restricted for the purchas e of capital assets are deferred and amortized into revenue on a straight-line basis at rates corresponding to those of the related capital assets.