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Notes to Financial Statements

Year ended December 31, 2009

(Tabular amounts in Thousands of Dollars)

NextGen Biofuels Fund

During the year ended December 31, 2007, the Foundation entered into a funding agreement with the Government of Canada which provided for a conditional grant of $500,000,000 to be paid over the period to March 31, 2015, to create the NextGen Biofuels Fund (“NGBF”). The NGBF will provide financial support towards the establishment of first-of-kind facilities that demonstrate production pathways for next-generation renewable fuels at large demonstration scale. This support is provided to eligible recipients that are to include for-profit corporations, partnerships, limited partnerships or business trusts with legal capacity in Canada and that have access to expertise in next-generation renewable fuels production pathways. Agreements for financial support to eligible recipients include provisions for repayability from free cash flow of the funded project.

The Foundation will disburse up to March 31, 2017 (the “disbursement period”) its share of eligible project costs incurred or to be incurred by eligible recipients. With the exception of a reasonable amount reserved for related project monitoring and evaluation, collection of repayments and for wind-up costs, the Foundation shall return any portion of the NGBF at the earlier of the end of the funding agreement on September 30, 2027, and such earlier time or times subsequent to the end of the disbursement period as the Government of Canada may determine.

1. Significant accounting policies:

The financial statements have been prepared in accordance with Canadian generally accepted accounting principles and include the following significant accounting policies:

(a) Revenue recognition:

The Foundation follows the deferral method of accounting for contributions whereby contributions, including grants received and interest earned on the invested amounts are deferred and amortized to revenue as expenses and project disbursements are incurred.

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