So now we're going to be talking about Schedule 6, Detailed Financial Information.

Complete Schedule 6 if any of the following apply: the charity's gross revenue exceeds $100,000, the amount of all assets not used in charitable programs or administration is over $25,000, or if the charity has permission to accumulate funds. Depending on the accounting methods used and the allocation of revenues and expenditures, the financial statements may not match the financial information on Form T3010. Now remember, if any of the above points apply to the charity, you have to complete Schedule 6 and not Section D.

Continuing now with the assets of Schedule 6.

Enter the appropriate line assets and liability information such as cash on hand, bank accounts, and long-term investments on lines 4100 to 4170. Short-term investments are easily convertible to cash and have maturity dates of less than a year. Long-term investments mature in more than a year. For lines 4155, 4160, and 4165, use the fair market value of the assets if they were donated and the costs if they were purchased. And for line 4170, "Other assets," enter the value of any assets the charity has that do not fall under any of the previous categories. Also record any restricted funds on line 4170. Other capital assets on line 4165 could include such items as equipment, computers, furniture, or vehicles. Please note that accumulated amortization is on capital assets only and should be a negative number. Line 4180, "10-year gifts," is new to Form T3010-1. This is where you enter the value of 10-year gifts included on lines 4100 to 4170. Ten-year gifts received by registered charities are gifts subject to the donor's written trust or direction that the registered charity hold onto the gift for at least 10 years. These gifts are a form of enduring property. Line 4250 is the amount of assets from lines 4150, 4155, 4160, 4165, and 4170 that were not used in charitable programs or administration for the year.

Continuing now with the liabilities of Schedule 6.

Line 4310, "Deferred revenue," applies only if using the accrual method. An example of deferred revenue is when a charity operates a daycare and has been paid in advance for services that haven't yet been rendered. And an example of other liability for line 4330 could be the unused part of a government grant that you have to return or the long-term part of debt obligations, such as a mortgage.

Continuing now with revenue for Schedule 6.

All revenue sources must be recorded on this schedule. This slide highlights a few of the lines that cause the most confusion or are new to the form. Line 4500: this line is used to record gifts received from individuals or businesses for which the charity issued a tax receipt. Do not record gifts received from other registered charities on this line. And remember, charities should not issue receipts to other registered charities. Line 4505: this line is new to the T3010-1. Enter the value of all 10-year gifts received which have been included on lines 4500, 4510, 4575, 4630, and 4650. Line 4530: this line is used to record gifts received from individuals or businesses for which the charity did not issue an official donation receipt, for example, collection boxes or anonymous gifts. Line 4510: this line is used to record gifts received from other registered charities. There are no longer any exclusions; therefore, the charities should include the total amount received from other registered charities. Lines 4540, 4550, and 4560: these lines are used to record funding from federal, provincial, and municipal governments.

Continuing on with revenue for Schedule 6.

Line 4580: do not report a loss. Interest and dividends are always positive or zero. Only capital investments can generate a loss. Line 4630: record total gross amount of non-tax-receipted revenue from fundraising, not just the profit earned. Do not include revenue for which tax receipts were issued. Those amounts, as mentioned before, should be reported as gifts on line 4500. Line 4700: the total revenue should go on this line. Please note that revenue lines that have not been presented today are explained in the guide T4033-1.

Now on to the expenditures part of Schedule 6.

Expenses are itemized twice in this section. First in specific expenditure categories such as travel and vehicle, occupancy costs, and salaries, and then on to specific lines to indicate program expenditures, amounts spent on management and administration, amounts spent on fundraising, political activities, and, of course, other expenditures, and gifts to qualified donees. Lines 4800 to 4850 are self-explanatory, and the Guide T4033-1 has more examples.

So, again, covering expenditures on the next slide.

For line 4860, record any expenses related to contractors that you have hired for specific work. Examples could be an accountant or other professionals. For line 4870, include any training or education that you have provided to your employees or volunteers such as courses, seminars, and conferences. On line 4880, include all of the salaries, honoraria, and benefits. Transpose the amounts from Schedule 3. Line 4890: enter the fair market value of all donated goods being used for charitable programs. For example, food used at the food bank or books out for a library. If the donated asset is being used for a charitable program, the fair market value of that asset should also be reported as an expenditure on line 5000.

Still on with the expenditures on the following slide.

Line 4891: record the cost of all purchased supplies and assets not otherwise recorded. Line 4900: record the amount of accumulated amortization on capital assets. Line 4910: if the charity provides research grants and scholarships as part of its charitable programs, it would be recorded here. Line 4920: other expenditures not included in the amounts above, excluding gifts to qualified donees. An example, the premium a charity may have to pay for life insurance policies which it has received from donors. For other examples, please refer to our guide.

Now we will be talking about the expenditure allocation of Schedule 6.

Line 5000: if you are a charitable organization, it is likely that the most of your charitable expenses will be on this line. If you are public or private foundation, gifts made to qualified donees are very important and these are later recorded on line 5050. Please note that if a charity records nothing on line 5000 or 5050, it will appear that it has not spent any resources on its charitable programs. Line 5010: please include expenditures related to management and administration. For line 5020, total expenses that the charity has paid for its fundraising activities. Any expenditures made in applying for grants or other types of government funding or funding from other qualified donees should be shown on line 5010 and not on line 5020. Line 5030: it is important for charities to complete this line if they carry out any activities such as petitions, marches, or media campaigns to try to change the law. As described in Policy Statement CPS-022, Political Activities, when the public observes that a charity is campaigning to change or retain a law, and they see that the charity has left this field blank, they can question the charity's reporting, and this could lead to complaints about the charity. Line 5040, "Other expenditures." This line is rarely used. Some expenditures, like I mentioned before, fall into different categories. In this case, it would be necessary to divide the amounts accordingly between the appropriate lines. For example, salaries can be considered partially charitable and partially administrative, and in that case, you would allocate part of the salary to line 5000 and the other part to line 5010. Line 5050 includes all of the amounts that your charity has given to other qualified donees.

"Other Financial Information."

Lines 5500 and 5510 are concerning permission to accumulate property. Permission to accumulate property is a provision that allows a charity to save for a specific purpose and be exempt from the 3.5% disbursement quota. The charity must apply in writing to us and provide details such as the project they're accumulating for, the time period that they're going to be accumulating for, and the amount that they wish to accumulate. Line 5750, "Permission to reduce the disbursement quota." A charity can apply for approval from the Minister to reduce their disbursement quota. If you wish to reduce your disbursement quota, please complete Form T2094, Registered Charities Application to Reduce Disbursement Quota, which can be found on the CRA website. Instances where we would reduce a charity's disbursement quota would be when the charity's building where it conducts its charitable activities has burned down.

"Other Financial Information, continued.

" For the purpose of the disbursement quota, property includes any real estate or personal property that was not directly used in charitable activities or administration. For example, cash, stocks, land or building not used directly in the charitable activities, or administration. Value of the property is the average value based on the specific number of periods over 24 months. Line 5900: enter the average value of the property not used in the charity's activities or administration during the 24 months before the fiscal period started. Line 5910 is where you would enter the average value of the property not used directly in the charity's activities or administration during the 24 months before the end of the fiscal period. Examples for lines 5900 and 5910 are, again, available in our guide.

"The Disbursement Quota."

As a result of legislative changes in the 2010 federal budget, not all charities will necessarily have a disbursement quota requirement. However, all charities must still devote their charitable resources on charitable activities. The disbursement quota is 3.5% of the amount that you've reported on line 5900, and it's only if that amount exceeds $25,000 for charitable foundations or $100,000 for charitable organizations. If you would like more examples of the disbursement quota, we have them available in our guide. Please note that specified gifts, enduring property, and capital gains pools are concepts that are no longer valid and do not apply and Form T1299, Capital Gains and Disbursement Quota Worksheet, no longer applies.

Thank you and we hope you enjoyed this webcast.

If you would like more information or you would like information on future live webinars, visit our Charities and Giving website and select "Educational resources for charities." Also, if you haven't already signed up for the electronic mailing list, we invite you to register on the Charities and Giving website by selecting "Educational resources for charities" and then selecting mailing lists. Once registered, you will receive one or two emails a month with new information and updates affecting registered charities. The electronic mailing list is also one of the communication channels we use to let you know when the next Charity Information webinars are.

If you would like more information on completing the Registered Charity Information Return, T3010-1, please contact our Client Service Section at 1-800-267-2384.