Notes to the Consolidated Financial Statements
b. Basis of consolidation i. Subsidiaries The Corporation’s direct and indirect subsidiaries, which are wholly owned by SaskEnergy, are as follows: Subsidiary Principal Activity Bayhurst Gas Limited Natural gas storage company Many Islands Pipe Lines (Canada) Limited Natural gas transmission company TransGas Limited Natural gas transmission and storage company On December 31, 2024, BG Storage Inc. was wound up, with all assets and liabilities being transferred to Bayhurst Gas Limited. BG Storage Inc. was a subsidiary of Bayhurst Gas whose principal activity was natural gas storage. BG Storage Inc. was also party to a 50.0 per cent ownership interest in a joint arrangement, which was transferred to Bayhurst Gas. The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries with all significant inter-company transactions and balances being eliminated. ii. Joint arrangements When assessing whether a joint arrangement is in the form of a joint operation or a joint venture, the Corporation considers the arrangement’s structure, legal form and contractual terms as well as any other relevant factors. The Corporation has one joint arrangement: a 50.0 per cent ownership in the Totnes Natural Gas Storage Facility located in Saskatchewan, Canada. The joint arrangement is in the form of a joint operation, as the Corporation has the rights to the assets, and obligations for the liabilities, relating to the arrangement. The consolidated financial statements include the Corporation’s share of jointly controlled assets, incurred liabilities, revenue and expenses, as well as any liabilities and expenses incurred directly in respect of its joint arrangement. c. Cash and cash equivalents Bank indebtedness forms part of the Corporation’s cash management and is included as a component of cash and cash equivalents for the purpose of the Consolidated Statement of Cash Flows. d. Natural gas in storage held for resale Natural gas in storage is stated at the lower of weighted average cost and net realizable value. Net realizable value is determined using natural gas market prices based on anticipated delivery dates. e. Inventory of supplies Inventory of supplies consist primarily of pipe and general stock for construction and maintenance and are stated at the lower of weighted average cost and net realizable value. Replacement value is used as management’s best estimate of net realizable value. When estimating the net realizable value, the Corporation also considers any obsolescence that may exist due to changes in technology. f. Financial and derivative instruments Financial instruments are classified into one of the following categories: financial assets and financial liabilities at fair value through profit or loss, amortized cost, and financial assets and financial liabilities at fair value through other comprehensive income. All financial instruments are measured at fair value on initial recognition. Transaction costs are included in the initial carrying amount of financial instruments, except for financial assets and financial liabilities at fair value through profit or loss, in which case the transaction costs are expensed as incurred. Measurement in subsequent periods depends on the classification of the financial instrument.
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