SASKENERGY 2018-19 ANNUAL REPORT
ii. Impairment of financial assets IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘expected credit loss’ (ECL) model. The expected credit loss model requires the Corporation to account for expected credit losses, and changes in those expected credit losses, at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. The new impairment model applies to financial assets measured at amortized cost and debt instruments at FVOCI, but not to investments in equity instruments. Under IFRS 9, credit losses are recognized earlier than under IAS 39. IFRS 9 also provides a simplified approach for measuring the loss allowance at an amount equal to lifetime ECL’s for trade receivables in certain circumstances. iii.Classification of financial assets and financial liabilities upon initial application of IFRS 9 Effective April 1, 2017, each class of financial assets and financial liabilities has maintained the same measurement category under IFRS 9 as its original measurement category under IAS 39. The exceptions are financial assets previously classified as loans and receivables, which are now classified as amortized cost, and debt retirement funds, which were previously classified as FVTPL and are now classified as FVOCI. d. Basis of consolidation The Corporation’s direct and indirect subsidiaries, which are wholly owned by SaskEnergy, are as follows:
Subsidiary
Principal Activity
Bayhurst Energy Services Corporation
Energy services company Natural gas storage company Natural gas storage company Natural gas transmission company
Bayhurst Gas Limited
BG Storage Inc.
Many Islands Pipe Lines (Canada) Limited Saskatchewan First Call Corporation
Underground infrastructure database company Natural gas transmission and storage company
TransGas Limited
After the sale of its two natural gas processing plants, the Corporation ceased operations of Bayhurst Energy Services Corporation effective March 31, 2019. e. Joint arrangements When assessing whether a joint arrangement is in the form of a joint operation or a joint venture, the Corporation considers the arrangement’s structure, legal form and contractual terms as well as any other relevant factors. The Corporation has one joint arrangement; a 50.0 per cent ownership in the Totnes Natural Gas Storage Facility located in Saskatchewan, Canada. The joint arrangement is in the form of a joint operation, as the Corporation has the rights to the assets, and obligations for the liabilities, relating to the arrangement. The consolidated financial statements include the Corporation’s share of jointly controlled assets, incurred liabilities, revenue and expenses as well as any liabilities and expenses incurred directly in respect of its joint arrangement. During the fiscal year, the Corporation sold its 50.0 per cent interest in the Kisbey Natural Gas Gathering and Processing Facility, a natural gas facility owned in Bayhurst Energy Services Corporation. The sale was effective October 1, 2018. f. Cash and cash equivalents Bank indebtedness forms part of the Corporation’s cash management and is included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows. g. Natural gas in storage held for resale Natural gas in storage is stated at the lower of weighted average cost and net realizable value. Net realizable value is determined using natural gas market prices based on anticipated delivery dates.
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