AIESEC INTERNATIONAL NOTES TO THE FINANCIAL STATEMENTS

AS AT MAY 31, 2020

3. Significant accounting policies (cont'd.)

(i) Financial instruments

(i) Measurement of financial instruments

The Organization initially measures its financial assets and financial liabilities at fair value. Amounts due to and from related parties are measured at the exchange amount, being the amount agreed upon by the related parties.

The Organization subsequently measures its financial assets and financial liabilities at amortized cost, except for derivatives and equity securities quoted in an active market, which are subsequently measured at fair value. Changes in fair value are recognized in excess revenues over expenditures.

Financial assets measured at amortized cost include cash, term deposit, accounts receivable and deposits.

Financial liabilities measured at amortized cost include accounts payable and accrued liabilities.

Financial liabilites measured at carrying amount included advance from related party.

(ii) Impairment

Financial assets measured at amortized cost are tested for impairment when there are indicators of possible impairment. When a significant adverse change has occurred during the period in the expected timing or amount of future cash flows from the financial asset or group of assets, a write-down is recognized in excess revenues over expenditures.

4. Term deposit

The term deposit bears interest at 0.50% (2019 - 1.0%) and matures in Novemer 2020 (2019November 2019)

The term deposit is pledged as collateral to the four credit cards issued on behalf of the Organization.