NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6. NATURAL GAS IN STORAGE HELD FOR RESALE
(millions)
2018
2017
$
70 (33)
Cost Revaluation to net realizable value
$
107 (21)
$ 37 $ 86 With the decline in natural gas market prices over recent years, the net realizable value of natural gas in storage as at March 31, 2018 was $33 million below cost (2017 - $21 million). As at March 31, 2018, the Corporation expects that $22 million of the current inventory value will be sold or consumed within the next fiscal year and $15 million of the current inventory value will be sold or consumed after more than one fiscal year.
7. DEBT RETIREMENT FUNDS
(millions)
2018
2017
$
101 9 (7) 2 105 -
$
102 9 (12) 2 101 (7)
Balance, beginning of period Installments Redemptions Earnings
Balance, end of period Less: Current portion of debt retirement funds
$
105 $
94
1
Change in fair value through OCI
-
$ 106 $ 94 The investments held in debt retirement funds are primarily Federal and Provincial Government debt instruments. The average return on these investments was 2.1 per cent for the period (2017 - 2.3 per cent). As at March 31, 2018 approximately $10 million is required to be invested in debt retirement funds on an annual basis. 8. ASSETS HELD FOR SALE As at March 31, 2018, a non-current asset was classified as held for sale within the consolidated statement of financial position. During 2017-18 the Corporation committed to a plan to sell a natural gas processing plant within the next 12-month period. The assets are measured at carrying amount, which is also equal to their fair value less costs to sell and were no longer depreciated. The carrying amount of the natural gas processing plant assets held for sale as at year end was $8 million. 9. FINANCIAL AND DERIVATIVE INSTRUMENTS For recurring and non-recurring fair value measurements, the Corporation estimates the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the reporting date under current market conditions. This requires the Corporation to make certain assumptions, including the principal (or most advantageous) market, the most appropriate valuation technique and the most appropriate valuation premise. The Corporation’s own credit risk and the credit risk of the counterparty have been taken into account in determining the fair value of financial assets and liabilities, including derivative instruments. In measuring fair value, the Corporation classifies items according to the fair value hierarchy based on the amount of observable inputs.
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