PEILCC 2023 Annual Report

PRINCE EDWARD ISLAND LIQUOR CONTROL COMMISSION Notes to Financial Statements Year Ended March 31, 2023

1. DESCRIPTION OF BUSINESS Prince Edward Island Liquor Control Commission (the "Commission") is a wholly owned Crown corporation of the Province of Prince Edward Island, established under the provisions of the Liquor Control Act and is therefore a non-taxable entity under the provisions of the federal Income Tax Act . The Commission is responsible for managing the importation, sale, and distribution of beverage alcohol throughout Prince Edward Island. The head office is located at 3 Garfield Street in Charlottetown with outlets in various locations across the province. 2. BASIS OF PRESENTATION The financial statements have been prepared in accordance with, and are in compliance with, International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The principal accounting policies applied in the preparation of the financial statements are set out in Note 4. These financial statements were authorized for issuance by the Board of Commissioners on June 27, 2023. The Board of Commissioners have the power to amend the financial statements after issue. 3. BASIS OF MEASUREMENT The financial statements have been prepared on a historical cost basis and are presented in Canadian dollars, which is the functional currency of the Commission. These financial statements have been prepared in accordance with IFRS, issued and in effect as of March 31, 2023. The significant accounting policies used in the preparation of these financial statements are summarized below. An overview of the standards, amendments, and interpretations on the conversion to IFRS, those adapted in the current year, and those which are issued but not yet in effect are presented below. IAS 1 Presentation of Financial Statements On January 23, 2020, IASB issued amendments to paragraphs 69 to 76 of IAS 1 Presentation of Financial Statements to specify the requirements for classifying liabilities as current or non-current. The amendments to IAS 1 are required to be applied for annual periods beginning on or after January 1, 2023. The amendments must be applied retrospectively in accordance with IAS 8. Cash Cash is comprised of cash on hand and amounts on deposit with financial institutions. Accounts receivable Accounts receivable arise from trade sales and amounts due from Prince Edward Island Cannabis Management Corporation. Amounts deemed uncollectible are written off and deducted from the carrying value of the receivable. Amounts subsequently recovered from accounts previously written off are credited to the allowance account in the period of recovery. (continues) 4. SIGNIFICANT ACCOUNTING POLICIES Changes in accounting standards

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PEILCC 2022-2023 Annual Report