PEILCC Annual Report 2025-2026

PRINCE EDWARD ISLAND LIQUOR CONTROL COMMISSION Notes to Financial Statements March 31, 2026

16. FINANCIAL INSTRUMENTS

The Commission applies IFRS 9 when accounting for its financial instruments. IFRS 9 specifies how an entity should classify and measure financial assets and financial liabilities. The carrying amounts presented in the statement of financial position relate to the following categories of financial assets and liabilities:

2026

2025

Financial assets

Financial asset measured at fair value through profit or loss Financial asset measured at amortized cost

$3,650,673 1,737,857 $5,388,530

$2,890,485 1,576,939 $4,467,424

Financial liabilities

Financial liabilities measured at amortized cost Non-current Lease liabilities

$3,228,051 3,228,051

$2,525,047 2,525,047

Current

15,362,869 5,641,286 849,219 $25,081,425

13,811,583 5,729,377 823,949 $22,889,956

Due to the Province of Prince Edward Island Accounts payable and accrued liabilities Current portion of lease liabilities

17. FAIR VALUE

Financial assets and liabilities are measured at fair value on initial recognition except for certain related party transactions. Measurement in subsequent periods is based on fair value through profit and loss or at amortized cost using the effective interest rate method. Financial assets and liabilities recorded in the statement of financial position at fair market value are categorized based on the fair value hierarchy of inputs. The Level 1 hierarchy is unadjusted quoted prices in active markets for identical assets and liabilities. This level of inputs is used to measure the fair value of cash. Fair value for accounts receivable, accounts payable and accrued liabilities, amounts due to/from the Province of Prince Edward Island approximate their carrying amounts due to their short term natures. The fair value of lease liabilities are not materially different from their carrying value as there has not been a significant fluctuation in interest rates. 18. FINANCIAL RISK MANAGEMENT The Commission is exposed to various risks through its financial instruments. The Corporation's financial assets and liabilities by category are summarized in Note 17. The following analysis provides information about the Commission's risk exposure and concentration as of March 31, 2026. (continues)

48 | PEILCC 2025-2026 Annual Report