Future-oriented Statement of Operations 2017-2018

Future-Oriented Statement of Operations (unaudited) for the year ending March 31 (in dollars)

 

Forecast results 2016–17

Planned results 2017–18

Expenses

Science and Technology for the North 9,435,930 13,921,546
Polar Knowledge Application 2,747,313 3,778,985
Internal services 4,809,270 4,824,961
Total expenses 16,992,513 22,525,492
Revenues
Revenues earned on behalf of government (19,400) (373,700)
Total revenues (19,400) (373,700)
Net cost of operations before government funding and transfers 17,011,913 22,899,192

The accompanying notes form an integral part of the Future-Oriented Statement of Operations.

Notes to the Future-Oriented Statement of Operations (unaudited)

  1. Methodology and significant assumptions

    The Future-Oriented Statement of Operations has been prepared on the basis of government priorities and departmental plans as described in the Departmental Plan.

    The information in the forecast results for fiscal year 2016-17 is based on actual results as at January 20, 2017 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2017-18.

    The main assumptions underlying the forecasts are as follows:

    • The department’s activities will remain substantially the same as in the previous year.
    • Expenses, including the determination of amounts internal and external to the government, are based on past experience. The general historical pattern is expected to continue.
    • Revenues were estimated based on the anticipated number of new hires that will be located in Cambridge Bay and occupy rental units.

    These assumptions are made as at January 20, 2017

  2. Variations and changes to the forecast financial information

    Although every attempt has been made to forecast final results for the remainder of 2016-17 and for 2017-18, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

    In preparing this Future-Oriented Statement of Operations, the Polar Knowledge Canada has made estimates and assumptions about the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based on past experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and are continually evaluated.

    Factors that could lead to material differences between the Future‑Oriented Statement of Operations and the historical statement of operations include:

    • the timing and the amount of acquisitions and disposals of property, plant and equipment, which may affect gains, losses and amortization expense;
    • the implementation of new collective agreements;
    • economic conditions, which may affect both the amount of revenue earned and the collectability of loan receivables;
    • other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.

    After the Departmental Plan is tabled in Parliament, the Polar Knowledge Canada will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Results Report.

  3. Summary of significant accounting policies

    The Future-Oriented Statement of Operations has been prepared using the Government of Canada’s accounting policies in effect for fiscal year 2016-17, and is based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

    Significant accounting policies are as follows:

    1. Expenses

      The department records expenses on an accrual basis.

      Expenses for the department’s operations are recorded when goods are received or services are rendered, including services provided without charge for accommodation, employer contributions to health and dental insurance plans, legal services and workers’ compensation, which are recorded as expenses at their estimated cost. Vacation pay and compensatory leave, as well as severance benefits, are accrued, and expenses are recorded as the benefits are earned by employees under their terms of employment.

      Transfer payments are recorded as expenses when the recipients have met all the eligibility criteria and the transfers are authorized by March 31. In the case of transfers that do not form part of an existing program, the transfers are considered to be authorized when the government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.

      Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable, provision for valuation on loans, investments and advances and inventory obsolescence, or liabilities, including contingent liabilities and environmental liabilities, to the extent the future event is likely to occur and a reasonable estimate can be made.

      Expenses also include amortization of tangible capital assets, which are capitalized at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset.

    2. Revenues

      Revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

      Funds that have been received are recorded as deferred revenue, provided the Department has an obligation to other parties for the provision of goods, services or the use of assets in the future.

      Revenues that are non-respendable are not available to discharge the department’s liabilities. Although the deputy head is expected to maintain accounting control, he or she has no authority over the disposition of non-respendable revenues. As a result, non respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented as a reduction of the department’s gross revenues.

  4. Parliamentary authorities

    The department is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the department differs from financial reporting according to generally accepted accounting principles because authorities are based mainly on cash flow requirements. Items recognized in the Future-Oriented Statement of Operations in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the department has different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

    a) Reconciliation of net cost of operations to requested authorities (in dollars)

     

    Forecast results 2016–17

    Planned results 2017–18

    Net cost of operations before government funding and transfers  17,011,913 22,899,192
    Adjustment for items affecting net cost of operations but not affecting authorities:
    Amortization of tangible capitals assets (68,902) (443,401)
    Services provided without charge by other government departments (332,542) (501,867)
    Increase in vacation pay and compensatory leave 54,993 49,710
    Increase in employee future benefits 15,750 2,707
    Refunds of previous years' expenditures 2,524 -
    Total items affecting net cost of operations but not affecting authorities (328,177) (892,851)
    Adjustment for items not affecting net cost of operations but affecting authorities:
    Acquisition of tangible capital assets 575,000 64,000
    Increase in prepaid expenses 35,665 (20,000)
    Total items not affecting net cost of operations but affecting authorities 610,665 44,000
    Requested authorities 17,294,401 22,050,341

    b) Authorities requested (in dollars)

     

    Forecast results 2016–17

    Planned results 2017–18

    Authorities requested
    Vote 1 – operating expenditures 16,672,324 21,419,316
    Statutory amounts 622,077 631,025
    Total authorities requested 17,294,401 22,050,341
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