Notes to the Consolidated Financial Statements (unaudited)
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 value, 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.
As at June 30,
As at March 31,
2023
2023
Classifi- Fair Value Carrying Fair Carrying Fair cation Hierarchy Amount Value Amount Value
(millions)
Financial and derivative assets Cash Trade and other receivables
$
25 $
25
FVTPL
Level 1 Level 2 Level 2 Level 2
$
6
$
6
158 169
158 169
AC
248 160
248 160
Debt retirement funds
FVOCI FVTPL
32
32
Fair value of derivative instruments
55
55
Financial and derivative liabilities Short-term debt
196
196
AC AC AC AC
Level 2 Level 2 Level 2 Level 2 Level 2
311 145
311 145
91
91
Trade and other payables
4
4
Dividends payable Long-term debt
6
6
1,767 1,600
1,647
1,508
30
30
Fair value of derivative instruments
FVTPL
36
36
Classification details:
AC - amortized cost
FVTPL - fair value through profit or loss
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.
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