5. Financial and derivative instruments (continued)
As at June 30,
As at March 31,
2020
2020
Classifi- Fair Value Carrying cation Hierarchy Amount
Fair
Carrying Amount
Fair
(millions)
Value
Value
Financial and derivative assets Cash Trade and other receivables
FVTPL Level 1 AC Level 2
$
2
$
2
$
1
$
1
111 139
111 139
155 136
155 136
Debt retirement funds
FVOCI
Level 2
Fair value of derivative instrument assets
FVTPL Level 2
18
18
15
15
Financial and derivative liabilities Short-term debt
AC Level 2 AC Level 2 AC Level 2 AC Level 2
150
150
279 120
279 120
Trade and other payables
89
89
Dividends payable
3
3
2
2
Long-term debt
1,494
1,957
1,359
1,532
Fair value of derivative instrument liabilities
FVTPL Level 2
15
15
21
21
Classification details: FVTPL - fair value through profit or loss AC - amortized cost FVOCI - fair value through other comprehensive income
The fair value of debt retirement funds is determined by Saskatchewan’s Ministry of Finance using a market approach with information provided by investment dealers. To the extent possible, valuations reflect indicative secondary pricing for these securities. In all other circumstances, valuations are determined with reference to similar actively traded instruments. The fair value of natural gas derivative instruments is determined using a market approach. The Corporation obtains quoted market prices from sources such as the Canadian Gas Price Reporter and the Natural Gas Exchange, independent price publications and over-the-counter broker quotes. The fair value of long-term debt is determined for disclosure purposes only using an income approach. Fair values are estimated using the present value of future cash flows discounted at the market rate of interest for the equivalent Province of Saskatchewan debt instruments. Notional values are an approximation of future undiscounted net cash flows. For physical natural gas contracts, the notional value is based on the contract price. Where contract prices are referenced to an index price that has not yet been fixed, the market price is used to estimate the contract price. As at June 30, 2020 natural gas derivative instruments had the following fair values, notional values and maturities in the next five fiscal years:
(millions)
2021
2022
2023
2024
2025
Total
Fair value
$
(4)
$
3
$
3
$
2
$
(1)
$
3
Notional value
$
(10)
$
9
$
3
$
4
$
-
$
6
Fair value - increase (decrease) in net income Notional value - estimated undiscounted net cash (outflow) inflow
2020-21 First Quarter Report
24
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