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TOURISM CHILLIWACK INC.
Notes to Financial Statements (continued)
Years ended December 31, 2011 and 2010
1. Significant accounting policies (continued):
(c) Revenue recognition:
Grant revenues are recognized when the grants have been approved and the conditions
required to earn the grants have been completed.
Revenue from the sale of goods is recorded at time of sale.
Advertising commission revenue is recognized when the related advertisement or
commercial appears before the public.
(d) Long-term investments:
Long-term investments are recorded at amortized cost plus accrued interest. If it is
determined that there is a permanent impairment in the value of an investment, it is written
down to net realizable value.
(e) Goodwill:
Goodwill is the residual amount that results when the purchase price of an acquired
business exceeds the sum of the amounts allocated to the assets acquired, less liabilities
assumed, based on their fair values. Goodwill is allocated, at the date of the business
combination, to the Company’s reporting units that are expected to benefit from the
synergies of the business combination.
Goodwill is not amortized and is tested for impairment annually, or more frequently if events
or changes in circumstances indicate that the asset may be impaired. The impairment test
is carried out in two steps. In the first step, the carrying amount of the reporting unit is
compared with its fair value. When the fair value of a reporting unit exceeds its carrying
amount, goodwill of the reporting unit is considered not to be impaired and the second step
of the impairment test is unnecessary. The second step is carried out when the carrying
amount of a reporting unit exceeds its fair value, in which case the implied fair value of the
reporting unit's goodwill is compared with its carrying amount to measure the amount of the
impairment loss, if any. The implied fair value of goodwill is determined in the same manner
as the value of goodwill is determined in a business combination described in the preceding
paragraph, using the fair value of the reporting unit as if it was the purchase price. When the
carrying amount of reporting unit goodwill exceeds the implied fair value of the goodwill, an
impairment loss is recognized in an amount equal to the excess and is presented as a
separate line item in the statement of earnings before extraordinary items and discontinued
operations.
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Tourism Chilliwack Inc.
Financial Statements
2011 City of Chilliwack Annual Report
72