Notes to the Consolidated Financial Statements
The Corporation leases the following types of assets: • Buildings and parking lots • Vehicles • Computers and computer equipment The accounting policies applicable to the Corporation as a lessor under IFRS 16 remain largely unchanged from those under IAS 17. The Corporation does not have any leases from the lessor perspective.
The impact of adoption of IFRS 16 is as follows:
April 1, 2019
As Reported Upon Adoption of IFRS 16
Excluding the Impact of IFRS 16
IFRS 16 Impact at Date of Adoption
(millions)
Notes
ASSETS Property, plant and equipment
$
2,505
$
(9) $
2,496
-
16
16
Right-of-use assets
3
LIABILITIES Current liabilities Current portion of lease liability
2 2
$
3 5
$
3 $
6 9
Lease liability
4
Notes 1) Reclassification of finance leases Leases previously accounted for as finance leases under IAS 17 were reclassified to ROU assets and lease liabilities from property, plant and equipment and finance lease obligations, respectively. 2) Lease liability On adoption of IFRS 16, the Corporation recognized additional lease liabilities in relation to leases which had previously been classified as operating leases under the principles of IAS 17. Under the principles of the new lease standard, these leases have been measured at the present value of the unpaid lease payments, discounted using the rate implicit in the lease. In some cases, that rate is not readily determined, therefore the Corporation’s incremental borrowing rates were applied. The incremental borrowing rate used was four per cent at April 1, 2019. Short-term and low-value leases were excluded. Total lease liability of $15 million was recorded at April 1, 2019, of which $6 million was the current portion. Lease payments are allocated between the liability and finance costs. The finance cost is charged to net earnings over the lease term. The lease liability is re-measured when there is a change in the future lease payments arising from a change in an index or rate, if there is a change in the amount expected to be payable under a residual value guarantee or if there is a change in the assessment of whether the Corporation will exercise a purchase, extension or termination option that is within the control of the Corporation. When the lease liability is re-measured, a corresponding adjustment is made to the carrying amount of the ROU asset or is recorded in the Consolidated Statement of Comprehensive Income if the carrying amount of the ROU asset has been reduced to zero. 3) Right-of-use assets The Corporation recognized ROU assets for buildings and parking lots at the date of initial application for leases previously classified as operating leases applying IAS 17. They were measured at an amount equal to the lease liability, adjusted by any prepaid or accrued lease payments relating to that lease recognized in the statement of financial position immediately before the date of initial application.
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