Continuing on now to the financial information.

Charities must complete either Section D or Schedule 6 when filling out their financial information. Please do not complete both. Charities that meet all of the following criteria can complete Section D: their gross revenue is less than $100,000, their assets not used in charitable programs are less than $25,000, and they do not have permission to accumulate funds. If the charity does not meet any one of the above criteria, it must complete Schedule 6.

Let's talk about Section D: Financial Information.

D1: identify the financial—if the financial information was prepared on a cash or accrual basis. Cash basis records revenue when received and expenses when paid. And your accrual basis records revenues when earned and expenses when incurred. D2: total assets and liabilities. Here you would identify if you own any buildings or land. Tick yes if the charity borrowed, loaned, or invested assets with any person who is not at arm's length with the charity. Note that this could possibly lead to private benefit issues.

Continuing on now with Section D.

We're going to be talking about the revenue. Line 4500, "Tax-receipted amounts." There are no longer any exclusions. Therefore, the charity should include all tax-receipted gifts. Remember, do not include gifts received from other registered charities. Report this on line 4510. Line 4505, "10-year gifts." Registered charities can receive gifts subject to a donor's written trust or direction that the registered charity hold the gift for at least 10 years. Line 4510, "Amounts received from other charities." There are no longer any exclusions. Therefore, the charities should include all amounts received from other registered charities. Remember, charities should not issue receipts to other registered charities. There is no benefit to using an official donation receipt, as all registered charities are not subject to income tax. Line 4630, "Fundraising." Do not include revenue for which tax receipts were issued on this line. If a receipt was issued, report that amount on line 4500.

Continuing on to the next slide, starting with D4: Expenditures.

On line 5000, include all expenditures essential for the charity to carry out its charitable programs, and examples of expenditures that you should include on line 5010 are costs of holding meetings for the board of directors, accounting costs, auditing costs, personnel and other administrative services, supplies, and occupancy costs. Line 5050 is the "Total amount of gifts made to all qualified donees," and for line 5100, "Total Expenditures," add the amounts from line 4950 and the amount from line 5050. We've noticed that while doing our audits, a lot of charities are not completing Section D or Schedule 6 properly. If an amount is entered on line 4700, "Total revenue," there must be a corresponding entry on line 5100, "Total expenditures." Putting a zero on line 5100 or leaving it blank may fail to take into account all of the amounts listed in the expenditures section in the return. We have noted that this often happens and it appears to be an addition error or an error in the transposing of the numbers from the financial statements. The Charities Directorate has started to send letters to charities who have improperly completed line 5100, advising them of the error and reminding them to properly fill in those fields in the future.

Continuing now, again, with Section D.

Disbursements on charitable programs on line 5000 could include: salaries to perform the charitable activities; equipment needed for the charitable programs; mortgages, rental fees, etc., for buildings used in the charitable programs; building maintenance (again, for the buildings used in the charitable programs). Management and administrative expenses of the charity on line 5010 could include: costs of holding meetings for the board of directors; expenses for accounting, auditing, personnel and other administrative services; banking fees; and the cost of purchasing supplies and equipment. There may be instances where a charity will have to prorate expenses between lines 5000 and 5010. For example, a charity may have an individual who devotes 50% of his or her time on the charitable activities and 50% of his or her time on management and administrative expenses. In this instance, it would be appropriate to prorate the person's salary and put 50% on line 5000 and 50% on line 5010. Fundraising expenses are not charitable expenses.

That completes Section D. Now on to Section E: Certification.

The T3010 must be signed by a director, trustee, or like official. The T3010 cannot be signed by a third party or a tax preparer. The person signing the return is certifying that, to the best of his or her knowledge, the information in all components of the return is correct, complete, and current.

Now on to Section F: Confidential Data.

Provide the physical addresses and please remember that books and records must be retained in Canada. You must provide a physical address of where the books and records are kept so that the CRA can access the books and records at any time. At F2, tick yes if the person who completed the return is the same person who certified it in Section E.