NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
a. Impairment losses due to market conditions The Corporation has two cash generating units that are adversely impacted by market conditions, its non-core gas storage facilities that support gas marketing activities and a gas processing plant. At March 31, 2018, as a result of a decline in natural gas prices, the Corporation has recorded a cumulative impairment on its non-core gas storage facilities of $13 million. During 2017-18, a $15 million impairment reversal was recorded. This relates to a storage field asset, which due to a change in corporate strategy moved from the non-core gas storage facility cash generating unit, into a larger pool of core storage assets, where it will be used to provide storage service and transmission avoidance to customers within a regulatory framework. The remaining non-core gas storage facilities are fully impaired. The impairments on the remaining storage assets were recognized as the carrying value of the assets exceeded the recoverable amounts. The recoverable amount was the value in use determined using cash flows attributed to probable production and adjusted for future market prices, discounted at 6.9 per cent. The impairment losses have been recognized within other gains and losses. At March 31, 2018, also as a result of a decline in natural gas and natural gas liquid prices, the Corporation has recorded a cumulative impairment on one of its treatment and compression facilities of $10 million. The impairments were recognized as the carrying value of the assets exceeded the recoverable amounts of $8 million for its gas processing plant and gathering facilities. The recoverable amount was the value in use determined using cash flows attributed to probable production and adjusted for future market prices, discounted at 8.2 per cent. The impairment losses have been recognized within other gains and losses. The Corporation does not anticipate recovery of the impairments unless there is a significant change in current and forward natural gas and natural gas liquid prices. Future natural gas prices are the main source of estimation uncertainty in determining the recoverable amount of the Corporation's assets. As at March 31, 2018, a five per cent increase in future natural gas and natural gas liquid prices would have increased the recoverable amount and reduced the impairment loss by $4 million. In future periods, any increases to future natural gas and natural gas liquid prices will result in the reversal of previously incurred impairment losses, up to the carrying value of the associated assets. b. Impairment loss due to performance of assets At March 31, 2018, as a result of lower than expected economic performance, the Corporation has recorded a cumulative impairment of $6 million on its energy services assets which are categorized within the Corporation’s distribution assets. The impairment was recognized as the carrying value of the assets exceeded the recoverable amount. The recoverable amount was the value in use determined using cash flows attributed to probable production and adjusted for future market prices, discounted at 6.9 per cent (2017 - 6.9 per cent). The impairment losses have been recognized within other gains and losses, with the full $6 million recognized in the prior year. The Corporation does not expect recovery of these impairments. At March 31, 2018, also as a result of lower than expected economic performance, the Corporation has recorded an impairment of $22 million on one of its treatment and compression facilities. The impairment was recognized as the carrying value of the assets exceeded the recoverable amount. The recoverable amount was the value in use determined using cash flows attributed to probable production and adjusted for future market prices, discounted at 7.0 per cent. The impairment losses have been recognized within other gains and losses, with the full $22 million recognized in the current year. The Corporation does not expect recovery of these impairments. 13. TRADE AND OTHER PAYABLES
(millions)
2018
2017
$
66 12 49
Trade payables Interest payable Other payables
$
64 10 30
$
127 $
104
67
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