NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The effect of IFRS 15 on the consolidated statement of comprehensive income is as follows:
MARCH 31, 2019
As Reported Income before Unrealized Market Value Adjustments
Excluding the Impact of IFRS 15
IFRS 15 Impact
(millions)
REVENUE Natural gas sales
- $
452 289 163
$
452 $
Delivery
290 165
(1) (2)
Transportation and storage Customer capital contributions
29
26
3
4
Other
4
- - -
937 803 134
937 803
EXPENSES, NET FINANCE EXPENSE, OTHER GAINS
- $
Total net income
$
134 $
Previously, recognition of revenue in a multiple element arrangement was not contingent upon either delivering additional items or meeting other specified performance conditions. The new standard requires that amounts contingently billable and collectible in the future be recognized as revenue to the extent we have satisfied our performance obligations to the customer. For a contract with a customer, this has the effect of allocating a portion of the total consideration to customer capital contribution revenue, which is recognized at the inception of the contract, and less to future service revenue. IFRS 15, Revenue from Contracts with Customers did not have an impact on the statement of cash flows. Effective April 1, 2017, the Corporation early adopted IFRS 9 Financial Instruments on a retrospective basis. As a result of the adoption of IFRS 9, consequential amendments to IAS 1 Presentation of Financial Statements were adopted, which requires impairment of financial assets to be presented in a separate line item in the consolidated statement of comprehensive income. Previously, the approach was to include the impairment of trade receivables in other expenses. The Corporation also adopted consequential amendments to IFRS 7 Financial Instruments: Disclosures . These amendments were applied to 2017-18 disclosures. The key changes as a result of adoption are summarized below. i. Classification of financial assets and financial liabilities IFRS 9 Financial Instruments includes three principal classification categories for financial assets: measured at amortized cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL). The classification of financial assets under the new standard is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. The standard eliminates the previous IAS 39 Financial Instruments: Recognition and Measurement categories of held to maturity, loans and receivables and available for sale. The debt retirement funds were classified as FVTPL under IAS 39. The debt retirement funds are administered and managed by the Ministry of Finance. The business model objective is to hold the underlying investments in debt retirement funds to collect contractual cash flows to provide funds at the debt maturity. The contractual terms of the debt retirement funds give rise to earnings that are amounts for principal and the interest on the principal amount outstanding. As a result of the business model in which debt retirement funds are managed, they are now classified as financial assets at FVOCI under IFRS 9. The adoption of IFRS 9 has not had a significant effect on the Corporation’s accounting policies for financial assets or liabilities.
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