Notes to the Consolidated Financial Statements
6. Natural Gas in Storage Held for Resale The revaluation to net realizable value of natural gas in storage at March 31, 2024 was $nil (2023 - $nil). The Corporation expects that the total inventory value of $8 million could be consumed within the next fiscal year. 7. Debt Retirement Funds (millions) 2024 2023 Balance, beginning of year $ 160 $ 146 Installments 16 15 Earnings 4 1 Change in fair value through OCI (1) (2) Balance, end of year 179 160 Less: Current portion of debt retirement funds (11) - $ 168 $ 160
OCI - Other Comprehensive Income
The investments held in debt retirement funds are primarily Federal and Provincial Government debt instruments. The average return on these investments is 1.8 per cent for the period (2023 - 1.2 per cent). As at March 31, 2024, approximately $18 million (2023 - $16 million) is required to be invested in debt retirement funds on an annual basis. Unrealized market value adjustments through OCI represent the income impact of measuring debt retirement funds at fair value subsequent to initial recognition. The adjustment represents the change in the carrying amount of debt retirement funds during the period and is dependent on the market prices of the financial instruments held in the Debt Retirement Funds at the end of the reporting period. 8. Financial and Derivative Instruments For recurring and non-recurring fair value measurements, the Corporation estimates the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the reporting date under current market conditions. This requires the Corporation to make certain assumptions, including the principal (or most advantageous) market, the most appropriate valuation technique and the most appropriate valuation premise. The Corporation’s own credit risk and the credit risk of the counterparty are taken into account in determining the fair value of financial assets and liabilities, including derivative instruments. In measuring fair value, the Corporation classifies items according to the fair value hierarchy based on the amount of observable inputs. Level 1 valuations use quoted prices (unadjusted) that are available in active markets for identical assets or liabilities as at the reporting date. Active markets are those in which transactions occur in sufficient frequency and volume to provide ongoing pricing information. Level 2 valuations are based on inputs that are either directly or indirectly observable for the asset or liability as at the reporting date. Inputs include quoted market prices, time, volatility factors and broker quotations which can be substantially observed or corroborated in the marketplace. Level 3 inputs are unobservable for the particular assets and liabilities as at the reporting date. The Corporation did not classify any of its fair value measurements within Level 3.
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