26 EPRA ANNUAL REPORT 2018 ELECTRONIC PRODUCTS RECYCLING ASSOCIATION Notes to Financial Statements Year ended December 31, 2018 The Electronic Products Recycling Association (the “EPRA” or the “Association”) is an industry-led, not-for- profit association dedicated to ensuring the safe, secure and responsible recycling of end-of-life electronics and ensuring compliance with the provincial regulations on electronics recycling. Members of Electronics Product Stewardship Canada and the Retail Council of Canada established the EPRA in 2011. The EPRA collects environmental handling fees from registered companies (stewards) which sell electronics into the marketplace. These fees are in turn used to pay the handlers of end-of- life electronics, mainly collection depots, transportation companies and processors. The fees also cover the communication and education outreach on the electronics recycling programs and drop-off locations. The EPRA was incorporated on April 14, 2011 as a Canadian not-for-profit organization without share capital. The Association was previously incorporated under the Canada Corporations Act and was continued under the Canada Not-for-profit Corporations Act in March 2013. The Association operates programs in British Columbia, Saskatchewan, Manitoba, Quebec, New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland and Labrador without monetary gain or profit to its stewards. The EPRA also provides management administration to the Ontario Electronic Stewardship program. The EPRA is exempt from income taxes under Section 149 (1) of the Income Tax Act (Canada). 1. Significant accounting policies: These financial statements have been prepared by management in accordance with Canadian accounting standards for not-for-profit organizations: (a) Revenue: The Association follows the deferral method of accounting for revenue. Environmental handling fees (“EHF”) are received from registered stewards within the provinces which participate in the EPRA program. The Association recognizes these fees as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. EHF revenue is recognized as individual stewards’ report and remit them as required by applicable provincial environmental legislation. Management fee and interest revenue are recognized as earned. (b) Direct collection, handling and processing and other expenses: Processing, handling and collection expenses (including transportation, warehousing and related storage) are recorded on the date the electronics are gathered from collection sites. Other expenditures are recognized as incurred. (c) Allocated expenditures: Allocated expenditures, such as administration services, including harmonization costs, recycling quality office costs, administration and other governance expenses, are allocated to the EPRA regions of British Columbia, Saskatchewan, Manitoba, Quebec, New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland and Labrador based on actual costs as incurred. (d) Capital assets: Purchased capital assets are recorded at cost. Amortization is provided on a straight-line basis over the estimated useful lives of the assets. Repairs and maintenance costs are charged to expense. Betterments which extend the estimated life of an asset are capitalized. When a capital asset no longer contributes to the Association’s ability to provide services, its carrying amount is written down to its residual value. Software 3 years Furniture and equipment 5 years Equipment 5 years Leasehold improvements Lesser of the estimated useful life and lease term