Page 46 - 2009_2010_Annual_Report

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Saskatchewan Indian Gaming Authority
NOTES TO THE FINANCIAL STATEMENTS
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Year Ended March 31, 2010
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3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROMOTIONAL ALLOWANCE
SIGA offers a customer loyalty program to its patrons. As part of the program, members accumulate points based on amounts
wagered on slot machines. Members can redeem their points for cash. SIGA records the points accumulated as a liability and
a promotional allowance.
PENSION EXPENSES
SIGA’s matching contributions to the defined contribution pension plan for employees are recorded as expenses are incurred.
SHORT-TERM INVESTMENTS
Short-term investments consist of investments in a Canadian money market fund and two guaranteed investment certificates.
The first guaranteed investment certificate earns interest at an annual rate of 0.58% and matures on October 4, 2010. The
second guaranteed investment certificate earns interest at an annual rate of 0.82% and matures on March 25, 2011.
USE OF ESTIMATES
The preparation of financial statements in accordance with GAAP requires management to make estimates that affect the reported
value of assets and liabilities and the disclosure of contingent liabilities and commitments at the date of the financial statements
and the amounts of revenues and expenses for the year then ended. Significant items subject to estimates include the carrying
amounts of capital assets and underlying estimations of useful lives, certain accrued liabilities, and the derivative liability. Actual
results could differ from those estimates.
INCOME TAXES
SIGA was incorporated under The Non-Profit Corporations Act of Saskatchewan and is not subject to income tax under the
provision of paragraph 149(1)(1) of the Income Tax Act.
SIGA also pays Goods and Services Tax and Provincial Sales Tax to government agencies and claims input tax credits on its
ancillary operations.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are initially recognized at fair value and their subsequent measurement is dependent on
their classification as described below. Cash is classified as held-for-trading and is recorded at fair value. Short-term investments
are classified as held-for-trading and are recorded at fair value. Cost approximates fair value for these short-term investments.
Accounts receivable are classified as loans and receivables and are recorded at amortized cost. Amortized cost approximates fair
value due to the short-term nature of these instruments. Accounts payable and accrued liabilities are classified as other liabilities
and are recorded at amortized cost. Due to SLGA is classified as other liabilities and is recorded at amortized cost. Amortized cost
approximates fair value due to the short-term nature of these instruments. Long- term debt is classified as other liabilities and is
recorded at amortized cost. Fair value information is disclosed in Note 12. In order to manage its interest rate risk exposure, SIGA
entered into separate interest rate swap arrangements for the Dakota Dunes, Living Sky and Painted Hand construction projects on
December 12, 2007. These arrangements fixed the interest rates for the loan for each construction project at 4.94%, 5.09% and
5.09% respectively over the term of the loans.
These interest rate swaps are classified as held-for-trading and are recorded at fair value. SIGA does not have any outstanding
contracts or financial instruments with embedded derivatives that are required to be separately valued. Regular way purchases
and sales of financial assets are accounted for at their trade date.