5. Financial and derivative instruments (continued)
As at September 30,
As at March 31,
2019
2019
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
$
1
$
1
$
6
$
6
95
95
156 121
156 121
Debt retirement funds
FVOCI
Level 2
136
136
Fair value of derivative instrument assets
FVTPL Level 2
12
12
41
41
Financial and derivative liabilities Short-term debt
226
226
AC Level 2 AC Level 2 AC Level 2 AC Level 2 AC Level 2
260 117
260 117
Trade and other payables
96 14
96 14
Lease liability
8
8
Dividends payable
-
-
43
43
Long-term debt
1,341
1,578
1,180
1,332
Fair value of derivative instrument liabilities
FVTPL Level 2
15
15
17
17
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 September 30, 2019 natural gas derivative instruments had the following fair values, notional values and maturities in the next six fiscal years:
(millions)
2020
2021
2022
2023
2024
2025
Total
Fair value
$
1
$
(6)
$
-
$
1
$
2
$
(1)
$
(3)
Notional value
$
(8)
$
(16)
$
2
$
2
$
2
$
(1)
$
(19)
Fair value - increase (decrease) in net income Notional value - estimated undiscounted net cash (outflow) inflow
23
2019-20 SECOND QUARTER REPORT
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