AIESEC INTERNATIONAL NOTES TO THE FINANCIAL STATEMENTS

AS AT MAY 31, 2020

3. Significant accounting policies

The financial statements were prepared in accordance with Canadian accounting standards for not for-profit organizations in Part III of the CPA Canada Handbook – Accounting, and include the following significant accounting policies:

(a) Measurement uncertainty

The preparation of financial statements in conformity with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenditures during the reported period. Estimates are used when accounting for certain items such as allowance for doubtful accounts, the useful life of property and equipment, and accrued liabilities. Actual results could differ from those estimates.

(b) Cash and cash equivalents

The Organization's policy is to present bank balances under cash and cash equivalents, including bank overdrafts when bank balances that fluctuate frequently from being positive to overdrawn, and temporary investments with a maturity period of three months or less from the date of acquisition. In addition, term deposits that the Organization cannot use for current transactions, because they are pledged as collateral, are excluded from cash and cash equivalents.

(c) Property and equipment

Property and equipment are recorded at cost. The Organization provides for amortization using the declining balance method at rates designed to amortize the cost of the property and equipment over their estimated useful lives. The annual amortization rate is as follows:

Furniture & fixtures 20%

Amortization of leasehold improvements is recorded over the remaining term of the lease.

(d) Impairment of long-lived assets

Property and equipment are subject to amortization are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized when the carrying amount of the asset exceeds the sum of the undiscounted cash flows resulting from its use and eventual disposition. The impairment loss is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value.