2015-16 SaskEnergy Annual Report

2. Basis of preparation (continued) Information about significant management estimates and assumptions that have a risk of resulting in a significant adjustment is included in Note 3 as well as the following notes: Estimated unbilled revenue (Note 5) Net realizable value of natural gas in storage held for resale (Note 6) Fair value of financial and derivative instruments (Note 9) Useful lives and amortization rates for intangible assets (Note 11) Useful lives and depreciation rates for property, plant and equipment (Note 12)

Estimated unearned customer capital contributions (Note 16) Estimated future cost of decommissioning liabilities (Note 18)

During the period ended March 31, 2016, the Corporation modified its estimate of deferred revenue. As the Corporation’s customer capital contributions are often subject to refunds over a specified period, an estimate of these refunds remains in deferred revenue until the eligible refund period expires. Under the new methodology, the Corporation calculated the estimated refunds based on a customer’s requested delivery capacity rather than management’s estimate of future customer usage. This change is a more accurate reflection of the amount that is likely to be refunded, and as such, is an improvement over the previous estimation process. As a change in estimate, the impact was applied prospectively effective January 1, 2015 and resulted in approximately $25 million of additional customer contribution revenue for the 15-month period. As the estimate is dependent on future customer capital contributions received, the impact of the change to future periods is uncertain at the end of the reporting period. 3. Summary of significant accounting policies The accounting policies set out below have been applied consistently by the Corporation and its subsidiaries to all periods presented in the consolidated financial statements. Certain comparative amounts in the consolidated statement of comprehensive income have been reclassified to conform with the current fiscal year’s presentation (Note 23). a. Changes in accounting policies Effective January 1, 2015, the Corporation adopted the following amended IFRS on a prospective basis: IAS 19 Employee benefits The adoption of this amended standard had no impact on the consolidated financial statements for the period ended March 31, 2016. b. Basis of consolidation Subsidiaries are entities controlled by SaskEnergy. The results of operations of subsidiaries are included in the consolidated financial statements from the date control commences until the date control ceases. All intra-group balances and transactions are eliminated in preparing the consolidated financial statements. The Corporation’s direct and indirect subsidiaries, which are wholly owned by SaskEnergy, are as follows:


Principal Activity

Bayhurst Energy Services Corporation Bayhurst Gas Limited BG Storage Inc. Many Islands Pipe Lines (Canada) Limited Saskatchewan First Call Corporation TransGas Limited

Energy services company Natural gas storage company Natural gas storage company Natural gas transmission company

Underground infrastructure database company Natural gas transmission and storage company



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