4. Natural gas in storage held for resale (continued)
The net realizable value of natural gas in storage at the end of the quarter was $7 million below cost (March 31, 2016 - $34 million below cost). As at December 31, 2016, the Corporation expected that $106 million of the current inventory value would be sold or consumed within the next year, and $28 million of the current inventory value would be sold or consumed after more than one year.
5. Financial and derivative instruments
As at December
As at March
31, 2016
31, 2016
Classifi- Fair Value Carrying cation Hierarchy Amount
Fair
Carrying Amount
Fair
(millions)
Value
Value
Financial and derivative assets Cash Trade and other receivables
$
-
$
-
FVTPL
n/a n/a
$
11
$
11
114 100
114 100
LAR
104 102
104 102
Debt retirement funds
FVTPL Level 2
Fair value of derivative instrument assets
9
9
FVTPL Level 2
11
11
Financial and derivative liabilities Bank indebtedness
1
1
FVTPL Level 1
-
-
329 119
329 119
Short-term debt
OL OL OL OL
n/a n/a n/a
299 105
299 105
Trade and other payables
14
14
Dividends payable
21
21
1,019
1,144
Long-term debt
Level 2
970
1,099
Fair value of derivative instrument liabilities
37
37
FVTPL Level 2
109
109
Classification details: FVTPL - fair value through profit or loss LAR - loans and receivables OL - other liabilities
The fair value hierarchy is not applicable where the carrying amount approximates fair value due to the short-term nature of the financial instrument.
Certain commodity contracts for the physical purchase of natural gas qualify as own-use contracts. The Corporation entered into these contracts for the purpose of physical receipt of natural gas in accordance with its own expected sales requirements for commodity customers. As such, these non-financial derivative contracts are not recorded at fair value on the condensed consolidated statement of financial position; rather, the contracts are accounted for as a purchase at the time of delivery. The future commitments associated with these contracts are disclosed in Note 7.
20
2016-17 THIRD QUARTER REPORT
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