2015-16 SaskEnergy Annual Report

Estimated Unearned Customer Capital Contributions Customer capital contributions – related to the construction of new, customer-specific service connections – are recognized as deferred revenue until the related property, plant and equipment are available for use. The Corporation’s customer capital contributions, particularly those related to the transmission system, are often subject to refunds over a certain period. Consequently, when the related property, plant and equipment are available for use, an estimate of the potential refund remains in deferred revenue until the refund period has passed. At March 31, 2016, the Corporation estimated $61 million in customer capital contributions could be refunded in future periods. Estimated Future Costs of Decommissioning Liabilities The Corporation determines its obligations, legal and constructive, for the future costs of decommissioning certain natural gas facilities by estimating both the associated costs and timing of the necessary cash flows. The timing of future decommissioning is conditional upon the Corporation’s anticipated ongoing use for these facilities, while future decommissioning costs are estimated based on the Corporation’s experience and presented on a discounted basis. At March 31, 2016, the Corporation’s provisions were estimated at $130 million. A 0.5 per cent increase in the discount rates used to determine the provisions would have resulted in a $19 million increase in provisions at the end of March 31, 2016. A 0.5 per cent decrease would have resulted in a $23 million decrease. ACCOUNTING POLICY CHANGES Several new and amended standards, issued by the International Accounting Standards Board (IASB), became effective January 1, 2015. The impact of the adoption of these standards has been discussed in Note 3 of Corporation’s consolidated financial statements. Adoption of the new and amended standards resulted in no material impact on the Corporation’s consolidated financial statements The IASB has issued several new and amended standards that will become effective in future periods. Details on future changes in accounting policies are provided within Note 3 of the consolidated financial statements. While the Corporation continues to review these standards, the impact on its consolidated financial statements has not yet been determined.



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