The Financial Advisors Association of Canada Notes to Summary Consolidated Financial Statements

(in thousands of dollars)

December 31, 2022

1. Basis of Presentation

These summary consolidated financial statements include the accounts of TFAAC and its 100% owned subsidiaries: Advocis Protective Association, The Institute (also known as The Institute of Chartered Life Underwriters of Canada) and GAMA International Canada. Advocis Broker Services Inc. (ABS), a wholly-owned for-profit subsidiary, is accounted for using the equity method whereby the initial investment is recorded at cost and subsequently adjusted to reflect TFAAC’s pro-rata share of post-acquisition earnings and capital transactions of ABS.

The summary consolidated financial statements are derived from the audited consolidated financial statements, prepared in accordance with the Canadian accounting standards for not-for-profit organizations.

The preparation of these summary consolidated financial statements requires management to determine the information that needs to be included so that they are consistent in all material respects with, or represent a fair summary, of the audited consolidated financial statements.

Management prepared these summary consolidated financial statements using the following criteria: a) The summary consolidated financial statements include a statement for each statement included in the audited consolidated financial statements; b) Information in the summary consolidated financial statements agrees with the related information in the audited consolidated financial statements; c) Major subtotals, totals and comparative information from the audited consolidated financial statements are included; and d) The summary consolidated financial statements contain the information from the audited consolidated financial statements dealing with matters having a pervasive or otherwise significant effect on the summary consolidated financial statements.

A copy of the audited consolidated financial statements is available to all members on the member portal.

2. Capital Management

TFAAC’s capital comprises restricted and unrestricted fund balances.

Management develops an annual budget which is submitted to the Finance and Audit Committee (the “Committee”). The budget is developed to ensure adequate cash flows for operations and identified capital needs. A recommendation is made from the Committee to the Board of Directors (the “Board”) for approval of the budget. The 2022 budget was completed and approved by the TFAAC Board.

Management compares actual results to the budget monthly and reports these results to the Committee for review.

TFAAC’s operations are reliant on revenue generated annually from its membership fees, professional development course fees, continuing education and programs. These funds are used for general operations, advocacy and educational courses and programs that advance the professionalism of financial practitioners.