Page 47 - SIGA_2010-11 Annual Report

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Saskatchewan Indian Gaming Authority Inc.
Notes to the Financial Statements
Year Ended March 31, 2011
45
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ALLOCATION OF EXPENSES
Table game operations
Costs allocated to table game operations include actual direct expenses, and an allocation of indirect site expenses based on the
percentage of gross table revenue to total revenue on an individual casino site basis.
Central office costs are allocated to table game operations based on a percentage of gross table revenue to total revenue. These
central office costs are then allocated to each casino site based on the percentage of each casino site’s table net income to all
casinos’ table net income before the allocation of indirect site expenses.
Slot machine operations
Costs allocated to slot machine operations include actual direct expenses, and an allocation of indirect site expenses based on
the percentage of gross slot revenue to total revenue on an individual casino site basis.
All remaining central office costs net of table games and ancillary allocations are allocated to slot operations. These central
office costs are then allocated to each casino site based on its percentage of casino slot net income net of indirect site expenses.
Ancillary operations
Costs allocated to ancillary operations include actual direct expenses, and an allocation of indirect site expenses based on
the percentage of gross ancillary revenue to total revenue on an individual casino site basis.
Central office costs are allocated to ancillary operations based on a percentage of gross ancillary revenue to total revenue. These
central office costs are then allocated to each casino site based on the percentage of each casino site’s ancillary net income to
all casinos’ ancillary net income before the allocation of indirect site expenses.
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 money market fund earns interest at an annual rate of 1.00%. The first guaranteed investment certificate earns interest at an
annual rate of 1.04% and matures on October 2, 2011. The second guaranteed investment certificate earns interest at an annual
rate of 1.47% and matures on March 25, 2012.
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.