3. Summary of significant accounting policies (continued)
q. Future changes in accounting policies The following new standards are not yet effective and have not been applied in preparing these consolidated financial statements: IFRS 9 Financial Instruments – introduces a logical approach for the classification of financial assets driven by cash flow characteristics and the business model in which an asset is held. The new standard also replaces the rule-based hedge accounting requirements in IAS 39 Financial Instruments: Recognition and Measurement to more closely align the accounting with risk management activities. This standard is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. 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 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 consolidated financial statements for IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers . The anticipated impacts are as follows: IFRS 9 Financial Instruments – under the new financial asset classifications, the Corporation’s debt retirement funds are classified as fair value through other comprehensive income. Classification as such would eliminate the recognition of fluctuations in fair value on debt retirement funds in net income, as market value adjustments would be recorded in other comprehensive income. The Corporation has elected to early adopt for the fiscal period beginning April 1, 2017. 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. Capital management The Corporation’s objective when managing its capital is to maintain financial stability through the effective management of liquidity and capital structure. The Corporation finances its capital requirements through internally generated funds and injections of capital from the Government of Saskatchewan’s General Revenue Fund, typically in the form of debt. Under The SaskEnergy Act , the Corporation may borrow up to $1,700 million of debt upon approval of the Lieutenant Governor in Council (2016 – $1,700 million). Within this limit, the Corporation may borrow up to $500 million in temporary loans (2016 – $500 million), including a $35 million uncommitted line of credit with Toronto-Dominion Bank (2016 – $35 million). As at March 31, 2017, the Corporation had $1,312 million of debt outstanding (2016 – $1,269 million), including $293 million in temporary loans (2016 – $299 million), leaving $207 million of remaining short-term borrowing capacity (2016 – $201 million). The Corporation’s short-term debt is unsecured, with an average interest rate of 0.6% (2016 – 0.6%). The Corporation borrows all its capital, with the exception of occasional overnight loans from the Toronto-Dominion Bank, from the Government of Saskatchewan’s General Revenue Fund (the Province). The Corporation’s borrowing requirements constitute a minor portion of the Province’s total borrowings, and given the Province’s strong credit rating, the Corporation was able to acquire all its funding requirements during the period.
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Consolidated Financial Statements
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