NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The future cash flows are discounted at a credit-adjusted risk free rate based on the yield of Government of Canada bonds. The unwinding of the discount on provisions is recognized in net income as finance expense over the estimated time period until settlement of the obligation. The corresponding increase to property, plant and equipment is depreciated on a straight-line basis over the estimated useful life of the related asset. At each reporting date, the estimated carrying value of a decommissioning liability is reviewed with any changes recognized in the consolidated financial statements. p. Revenue Revenue is measured at the carrying value of the consideration received or receivable. Revenue is recognized when it is probable that future economic benefits will flow to the Corporation and these benefits can be measured reliably. i. Natural gas sales and delivery revenue Revenue is recognized when natural gas is delivered to the customer. An estimate of natural gas delivered but not billed is included in revenue. ii. Transportation and storage revenue Revenue is recognized when transportation, storage and related services are provided to the customer. An estimate of transportation, storage and related services rendered but not billed is included in revenue. iii. Customer capital contribution revenue The Corporation receives customer capital contributions related to the construction of new service connections. The contributions are recognized initially as contract liability and are recognized as revenue once the related property, plant and equipment is available for use. Customer capital contributions can be subject to refunds over a specified period. An estimate of these refunds is recognized as a liability until the refund period expires. iv. Other revenue Other revenue consists of natural gas liquid sales and compression and gathering services. Natural gas liquid sales are recognized when natural gas liquids are delivered to the customer. Compression and gathering revenue is recognized when compression and gathering services are provided to the customer. An estimate of natural gas and natural gas liquids delivered and compression and gathering services rendered but not billed is included in other revenue q. Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or development of a qualifying asset are added to the cost of that asset, until it is available for use. Qualifying assets are those assets that take a substantial period of time to get ready for their intended use. As the Corporation borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the borrowing costs are capitalized by applying its weighted average cost of debt. All other borrowing costs are recognized in finance expense in the period in which they are incurred. r. Leased assets The Corporation has assets that are leased. Leased assets are classified as finance leases when the Corporation acquires substantially all of the risks and rewards of ownership. Assets held under finance leases are initially recognized at the lower of their fair value at inception of the lease or the present value of the minimum lease payments. The corresponding liability is recorded within trade and other payables. Each lease payment is allocated between the liability and interest so as to achieve a constant rate of interest on the remaining balance of the liability. The interest component is included in finance expenses. See note 3b for a discussion of transition from IAS 17 to IFRS 16 effective April 1, 2019.
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