2. Basis of preparation (continued)
d. Use of estimates and judgments (continued)
Information about critical judgments in applying accounting policies that have a significant effect on the amounts recognized in the condensed consolidated financial statements include:
Revenue recognition related to unbilled revenue Existence of decommissioning liabilities Designation of own-use derivative contracts Whether a contract or arrangement includes a lease
Information about significant management estimates and assumptions that have a risk of resulting in a significant adjustment within the next financial period include:
Estimated unbilled revenue Net realizable value of natural gas in storage held for resale Fair value of financial and derivative instruments Useful lives and amortization rates for intangible assets Useful lives and depreciation rates for property, plant and equipment Recoverable amount of non-financial assets Estimated unearned customer capital contributions Estimated future cost of decommissioning liabilities Lease terms and the appropriate rate to discount lease payments
3. Summary of significant accounting policies
The accounting policies set out below have been applied consistently by the Corporation and its subsidiaries to all periods presented in the consolidated financial statements.
a. Change in accounting policies
i.
Leases
Effective April 1, 2019, the Corporation adopted IFRS 16, Leases , which supersedes IAS 17, Leases . The Corporation has applied the new standard using the modified retrospective approach, which does not require restatement of prior period financial information. Therefore, the comparative information in the Company’s consolidated balance sheet, consolidated statement of earnings, consolidated statement of retained earnings, and consolidated statement of cash flows have not been restated. IFRS 16 specifies how the Corporation will recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less, or the asset group has a low value. It also eliminates the previous separate treatment of operating leases. The focus of this standard is on controlling the use of an asset.
The Corporation leases the following types of assets:
Buildings
Parking lots
Vehicles
Computers and computer equipment
On adoption, Management elected to use the following practical expedients permitted under the standard:
Recognize right-of-use (ROU) assets at an amount equal to the lease liability for leases previously treated as operating leases Treat leases ending within 12 months of conversion as short-term leases Exclude initial direct costs of operating leases that are now finance leases Use of hindsight in determining lease terms Apply a single discount rate to a portfolio of leases with reasonably similar characteristics
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2019-20 FIRST QUARTER REPORT
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