Notes to the Condensed Consolidated Financial Statements (unaudited)
d. Use of estimates and judgments In the application of the Corporation’s accounting policies, which are described in Note 3, management is required to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Actual results may differ from these estimates. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. The estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised as well as any future periods affected. Information about critical judgments in applying accounting policies that have a significant effect on the amounts recognized in the condensed consolidated financial statements include: Revenue recognition related to unbilled revenue Existence of decommissioning liabilities Designation of own-use derivative contracts (Note 11) Significant areas requiring the use of management estimates are: Estimated unbilled revenue Expected credit losses (Note 5) Net realizable value of natural gas in storage held for resale (Note 4) Fair value of financial and derivative instruments (Note 5) Useful lives and depreciation rates for right-of-use (ROU) assets Useful lives and amortization rates for intangible assets Useful lives and depreciation rates for property, plant and equipment
Recoverable amount of non-financial assets (Note 8) Estimated unearned customer capital contributions Estimated future cost of decommissioning liabilities COVID-19 (Coronavirus) impact assessment
The COVID-19 pandemic caused material disruption to businesses and resulted in an economic slowdown. The Corporation assessed and continues to monitor the impact of COVID-19 on its operations. The degree to which COVID- 19 has a more pronounced longer-term impact on the Corporation’s operations and growth projects will depend on future developments, policies and actions, all of which remain highly uncertain. The Corporation’s expected credit losses and allowance for doubtful accounts appear to be the most significantly affected estimates. The Corporation’s business continuity plans remain in place while continuing to effectively operate assets, conduct commercial activities and execute on projects with a focus on health, safety and reliability. SaskEnergy is considered essential for the province of Saskatchewan given the important role the Corporation’s infrastructure plays in providing energy to customers.
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