Annual Financial Report 2017

NOTESTOTHE CONSOLIDATED CITY OF SURREY FINANCIAL STATEMENTS

For the year ended December 31, 2017 [tabular amounts in thousands of dollars]

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) a) Basis of consolidation (continued) iv) Surrey City Development Corporation (continued)

ii) Grove Limited Partnership and Grove (G.P.) Inc. - (50% owned and proportionately consolidated) iii) Surrey City Investment (Industrial) Corporation (“SCIIC”) - (100% owned and fully consolidated)

SCIIC has a 50% ownership in the Beedie SCDC (34A Ave) Limited Partnership (“Beedie LP”) – During fiscal 2017 Beedie LP met the criteria of a government business partnership and SCDC began accounting for it using the modified equity method. Previously Beedie LP was proportionately consolidated into SCDC’s financial statements as a government partnership. The change in presentation was made prospectively as of January 1, 2017. SCIIC has a 50% ownership in the Beedie SCDC (34A Ave) G.P. Ltd., the General Partner of Beedie LP. Beedie GP is a corporation and is accounted for using the modified equity method. iv) Kwantlen Park Development Corporation (“KPDC”) - (100% owned and fully consolidated) v) Surrey Homelessness and Housing Society On June 22, 2007, the City of Surrey incorporated the SHHS. The purposes of the Society are to raise funds for financing programs and projects that address homelessness in Surrey; conduct and provide financial assistance to homelessness housing initiatives; manage the disbursements of grants for projects and programs that address homelessness in Surrey and act to raise funds for these purposes. As the City appoints the majority of members in the Society, who then appoint the Society’s Board, the City is considered to have control over the Society’s functions and the Society’s financial information is fully consolidated within the City’s financial statements. The consolidated financial statements include the assets, liabilities, revenues and expenses of SHHS. All inter-entity accounts and transactions between SHHS and the City are eliminated upon consolidation. The City provided seed money to the SHHS and oversees its operations. vi) Innovation Boulevard Corporation On October 28, 2016, the City of Surrey and Simon Fraser University (“SFU”) incorporated the Innovation Boulevard Corporation (“IBC”), a government partnership. SFU and the City are the only shareholders of IBC with each having a 50% interest. The purposes of this company is the development of an integrated innovation and technology hub in Surrey that coordinates and facilitates the efforts of private industry, investors, the City, SFU, Fraser Health Authority, other levels of government, local universities and colleges, healthcare and other service providers, not-for-profit stakeholders, researchers, and leaders to build a dynamic infrastructure to support innovation, research, community engagement, private and public investment, job creation and oversight to improve the lives of the people of Surrey and beyond. The City has a 50% ownership in the Innovation Boulevard Corporation (“IBC”), a government partnership. The consolidated financial statements include the City’s 50% proportional share of the assets, liabilities, revenues and expenses of IBC. All inter-entity accounts and transactions between IBC and the City are eliminated proportionally upon consolidation.

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