(f)  Employee future benefits

• Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Courts Administration Service's contributions to the Plan are charged to expenses in the year incurred and represents the total obligation to the Plan. Current legislation does not require the Courts Administration Service to make contributions for any actuarial deficiencies of the Plan.
• Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

(g) Accounts receivables

Accounts receivables are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

(h) Foreign currency transactions

Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated using exchange rates in effect at year-end. Gains and losses resulting from foreign currency transactions are included in Registry Services and Internal Services expenses and Registry Services revenues on the statement of operations with the exception of the foreign exchange gain or loss relating to a long-term foreign currency denominated monetary item which is recognized in the financial statements, deferred and amortized to revenue / expense over the remaining life of the monetary item.

(i) Tangible capital assets

All tangible capital assets having an initial cost of $5,000 or more are recorded at their acquisition cost. The department does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the assets as follows:

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

(j) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the liability for employee severance benefits, the allowance for doubtful accounts and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary authorities

The Courts Administration Service receives most of its funding through annual Parliamentary authorities. Items recognized in the Statement of operations and the Statement of financial position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Department has different net results 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 current year authorities used

(in thousands of dollars)

(b) Authorities provided and used

(in thousands of dollars)

4. Accounts receivable and employee advances

The following table presents details of accounts receivable and employee advances:

(in thousands of dollars)

5. Tangible capital assets

Cost

(in thousands of dollars)

Accumulated amortization

(in thousands of dollars)

Net book value

(in thousands of dollars)

Disposals of assets under construction represent assets that were put into use in the year and have been transferred to the other capital asset classes as applicable.

Amortization expense for the year ended March 31, 2011 is $669,502 (2009-10 was $505,054).

6. Accounts payable and accrued liabilities

The following table presents details of accounts payable and accrued liabilities:

(in thousands of dollars)

7. Deposit accounts

The Courts Administration Service maintains two deposit accounts on behalf of litigants before the Courts. Pursuant to an order of the Court, the deposit accounts will record funds paid into the Federal Court of Appeal, Federal Court and Tax Court of Canada. These amounts are held as payments and eventually released, pending judgment of the Courts. The underlying differences of these two accounts are the calculation of interest as described below. 

Calculation of Interest:
Deposit Account for the Federal Court of Appeal & Federal Court:  Pursuant to the Order in Council P.C. 1970 4/2, the account earns interest semi annually at a rate that is equal to nine tenths of the monthly average of tender rates for three month Treasury bills and is calculated on the minimum monthly balance. 

Deposit Account for the Tax Court of Canada:  Pursuant to the Order in Council P.C. 1970-300, the account earns interest semi annually at a rate that is equal to ninety percent of the average of the weekly three month Treasury bills and is calculated on a daily basis.

(in thousands of dollars)

8. Employee future benefits

(a) Pension benefits
The Courts Administration Service's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Courts Administration Service contribute to the cost of the Plan. The 2010-11 expense amounts to $4,815,441 ($5,009,170 in 2009-10), which represents approximately 1.9 times (1.9 times in 2009-10) the contributions by employees.

The Courts Administration Service's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
(b) Severance benefits
The Courts Administration Service provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

(in thousands of dollars)

9. Related party transactions

The Courts Administration Service is related as a result of common ownership to all Government departments, agencies, and Crown Corporations. The Courts Administration Service enters into transactions with these entities in the normal course of business and on normal trade terms.

a) Common services provided without charge by other government departments

During the year the Courts Administration Service received services without charge from certain common service organizations, related to accommodation, legal services, the employer's contribution to the health and dental insurance plans and workers' compensation coverage. These services provided without charge have been recorded in the department's Statement of Operations as follows:

(in thousands of dollars)

⁽¹⁾ Note: Accommodation costs coded under the Judicial activities include the space of the court rooms, the Judges offices, the discovery rooms etc.

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada are not included in the Courts Administration Service's Statement of Operations.

(b) Other transactions with related parties

(in thousands of dollars)

10. Segmented information

Presentation by segment is based on the Courts Administration Service's program activity architecture. The presentation by segment is based on the same accounting policies as described in Note 2. Summary of significant accounting policies. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

(in thousands of dollars)

11. Adoption of new accounting policies

During the year, the Courts Administration Service adopted the revised Treasury Board accounting policy TBAS 1.2: Departmental and Agency Financial Statements which is effective for the Courts Administration Service for the 2010-11 fiscal year. The major change in the accounting policies of the Courts Administration Service required by the adoption of the revised TBAS 1.2 is the recording of amounts due from the Consolidated Revenue Fund as an asset on the Statement of Financial Position.

The adoption of the new Treasury Board accounting policies have been accounted for retroactively with the following impact on the comparatives for 2009-10:

(in thousands of dollars)

12. Comparative information

Comparative figures have been reclassified to conform to the current year’s presentation.