Future-Oriented Statement of Operations 2017‑18

Canadian Institutes of Health Research
Future-Oriented Statement of Operations (unaudited)
For the Year Ended March 31

(in thousands of dollars)
The accompanying notes are an integral part of the Future-Oriented Statement of Operations.
Investigator-Initiated Health Research $ 712,335 $ 729,496
Priority-Driven Health Research 352,680 337,932
Internal Services 30,886 31,327
Total expenses 1,095,901 1,098,755
Investigator-Initiated Health Research 88 190
Priority-Driven Health Research 7,813 7,354
Total revenues 7,901 7,544
Net cost of operations $ 1,088,000 $ 1,091,211

1. Methodology and Significant Assumptions

The Future-Oriented Statement of Operations has been prepared on the basis of the government priorities and departmental plans as described in the Department Plan.

The information in the forecast results for the fiscal year 2016-17 is based on actual results as at December 15, 2016 and forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2017-18 fiscal year.

The main assumptions underlying the forecasts are as follows:

  1. CIHR’s activities will remain substantially the same as for the previous year;
  2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on experience. The general historical pattern is expected to continue.

These assumptions are adopted as at December 15, 2016.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2016-17 and for 2017-18, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing this Future-Oriented Statement of Operations, CIHR has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the Future-Oriented Statement of Operations and the historical statement of operations include the following:

  1. The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense;
  2. Implementation of new collective agreements;
  3. Economic conditions may affect the amount of revenue earned; and
  4. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

After the Department Plan is tabled in Parliament, CIHR will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Results Report.

3. Summary of Significant Accounting Policies

The Future-Oriented Statement of Operations has been prepared using the Government of Canada’s accounting policies that came into effect for the 2016-17 fiscal year, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

(a) Expenses

Expenses are recorded on an accrual basis. Expenses for the Agency’s operations are recorded when goods are received or services are rendered, including services provided without charge for accommodation, employer contributions to health and dental insurance plans, legal services and worker’s compensation, which are recorded as expenses at their estimated cost. Vacation pay and compensatory leave, as well as severance benefits, are accrued and expenses are recorded as the benefits are earned by employees under their terms of employment.

Grants and awards (transfer payments) are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the future-oriented statement of operations.

(b) Revenues

Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.

Funds that have been received are recorded as deferred revenue, provided CIHR has an obligation to other parties for the provision of goods, services, or the use of assets in the future.

Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

4. Parliamentary Authorities

CIHR is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to CIHR do not parallel financial reporting according to generally accepted accounting principles because authorities are primarily based on cash flow requirements. Items recognized in the Future-Oriented Statement of Operations in one year may be funded through parliamentary authorities in prior, current, or future years. Accordingly, CIHR has different net cost 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 requested authorities

Forecast Results
Planned Results
(in thousands of dollars)
Net cost of operations $ 1,088,000 $ 1,091,211
Adjustments for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (6,905) (7,005)
Refunds of previous years' grants and awards 2,216 3,205
Increase in vacation pay and compensatory leave (13) (128)
Decrease in employee future benefits 352 142
Amortization of tangible capital assets (199) (324)
(4,549) (4,110)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 595 250
Increase in prepaid expenses 29 -
624 250
Requested authorities $ 1,084,075 $ 1,087,351

(b) Authorities requested

Forecast results for
Planned results for
(in thousands of dollars)
Vote 1 - Operating expenditures $ 53,488 $ 53,583
Vote 5 - Grants 1,024,787 1,027,949
Statutory - Contributions to employee benefit plan 5,800 5,819
Requested authorities $ 1,084,075 $ 1,087,351
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