7 NORTHERN COLLEGE OF APPLIED ARTS AND TECHNOLOGY Notes to Financial Statements Years ended March 31, 2013 and March 31, 2012 1. Significant accounting policies (continued): (e) Employment-related obligations: Vacation entitlements are accrued for as entitlements are earned (note 6). The College is liable to pay an employee’s accumulated sick leave in the event of sickness or injury . The College is liable to pay 50% of an elig ible employee’s vested sick leave credit on termination or retirement. For the post-employment benefit s (continuation of life, m edical and dental during LTD), these benefits are accounted for on a terminal basis, in comparison to the non-pension post-retirement benefit which is accounted on an accrual basis. This means that the liability for the post-employment benefit is accrued only when a LTD claim occurs. For these benefits, the full change in the liabilit y is being recognized immediately as an expense in the year. The College is an employer member of t he Colleges of Applied Arts and Technology Pension Plan, which is a multi-employer defined benefit pension plan. The College has adopted defined contribution account principl es for this Plan because insufficient information is available to apply defined benefit accounting principles (note 12). (f) Use of estimates: The preparation of financial statements r equires management to make estimates and assumptions that affect the reported amount s of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial stat ements and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the carrying value of capital assets, valuation allowances for accounts receivables ; and obligations related to employee future benefits. Actual results could differ from t hose estimates. These estimates are reviewed periodically, and, as adjustments become necessa ry, they are reported in earnings in the year in which they become known. (g) Student organizations: These financial statements do not reflect the a ssets, liabilities and results of operations of the various student organizations at the College.