2017 Annual Report

88 City of Chilliwack 2017 Annual Report TOURISM CHILLIWACK INC. Notes to Consolidated Financial Statements (continued) Year ended December 31, 2017 4. Tangible capital assets (continued): Not included in tangible capital assets is $68,143 (2016 - nil) of works of art and cultural assets. During 2017 the Company purchased and expensed $68,143 of works of art which is included in advertising and business development at the statement of operations. 5. Share capital: 2017 2016 Authorized: Unlimited Common shares Issued with no par value: 100 Common shares $ 1 $ 1 6. Related party transactions and economic dependence: During the year, the City of Chilliwack (the "City") provided funds under operating agreements totalling $460,000 (2016 - $455,000) to the Company. The City has agreed to provide future annual operating funds based on a pre-determined formula. The Company is a wholly-owned subsidiary of the City. 7. Financial instruments: The Company is exposed to financial risks from its use of financial instruments. Management does not believe that the Company's financial instruments are exposed to significant liquidity risk. Market risk is the risk that changes in market prices, such as interest rates, will affect the Company’s income. The Company's cash and term deposits include amounts on deposit with financial institutions that earn interest at market rates. The Company manages its cash by maximizing the interest income earned on excess funds while maintaining the liquidity necessary to conduct operations on a day-to-day basis. Fluctuations in market rates of interest would not have a significant effect on the Company's income. Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company is exposed to credit risk due to the potential non-collection of accounts receivable. 8 Tourism Chilliwack Inc. Financial Statements