3. Summary of significant accounting policies (continued)
b. Future changes in accounting policies
The following new standards are not yet effective and have not been applied in preparing these condensed consolidated financial statements:
IFRS 15 Revenue from Contracts with Customers – clarifies the principles for recognizing revenue from contracts with customers and will affect the Corporation’s accounting policies with respect to the following applicable revenue standards and interpretations upon its effective date:
IAS 18 Revenue IAS 11 Construction Contracts IFRIC 18 Transfer of Assets from Customers
This standard is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted.
IFRS 16 Leases – broadens the definition of a lease and increases transparency regarding a Corporation’s leasing obligations. Under the new standard, an asset and liability is recognized on the condensed consolidated statement of financial position for all material contracts that meet the definition of a lease. This standard is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted if IFRS 15 Revenue from Contracts with Customers has also been applied. The Corporation is continuing to review the new standards and has completed a preliminary assessment of the impact on its condensed consolidated financial statements for IFRS 15 Revenue from Contracts with Customers . The anticipated impact is as follows: IFRS 15 Revenue from Contracts with Customers – under the new control-based revenue model, the Corporation anticipates minimal impacts to the majority of its revenue streams, but has not yet determined the impact of the new standard to customer capital contribution revenue. Changes to the recognition of customer capital contribution revenue are contingent on the Corporation’s identification of performance obligations within the underlying customer contracts.
4. Natural gas in storage held for resale
As at June 30, 2017
As at March 31, 2017
(millions)
Cost
$
124
$
107
Revaluation to net realizable value
(25)
(21)
$
99
$
86
The net realizable value of natural gas in storage at the end of the quarter was $25 million below cost (March 31, 2017 - $21 million below cost). As at June 30, 2017, the Corporation expected that $72 million of the current inventory value would be sold or consumed within the next year, and $27 million of the current inventory value would be sold or consumed after more than one year.
5. 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 have been taken into account in determining the fair value of financial assets and liabilities, including derivative instruments.
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2017-18 FIRST QUARTER REPORT
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