NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2019
2018
Class- ification
Fair Value Hierarchy
Carrying Amount
Fair Value
Carrying Amount
Fair Value
(millions)
FINANCIAL AND DERIVATIVE ASSETS Cash Trade and other receivables Debt retirement funds Fair value of derivative instrument assets FINANCIAL AND DERIVATIVE LIABILITIES Bank indebtedness Short-term debt Trade and other payables Finance lease obligation Dividends payable Long-term debt Fair value of derivative instrument liabilities
$
6 156 121 41
$
6 156 121 41
FVTPL AC FVOCI FVTPL FVTPL AC AC AC AC AC FVTPL
Level 1 Level 2 Level 2 Level 2 Level 1 Level 2 Level 2 Level 2 Level 2 Level 2 Level 2
$
- 141 106 61 3 254 127
$
- 141 106 61 3 254 127
- 260 117 8 43 1,180 17
- 260 117 8 43 1,332 17
11 23 1,081 50
11 23 1,207 50
Classification details: FVTPL - fair value through profit or loss
AC - amortized cost FVOCI - fair value through other comprehensive income
The fair value of debt retirement funds is determined by Saskatchewan’s Ministry of Finance using a market approach with information provided by investment dealers. To the extent possible, valuations reflect indicative secondary pricing for these securities. In all other circumstances, valuations are determined with reference to similar actively traded instruments. The fair value of natural gas derivative instruments is determined using a market approach. The Corporation obtains quoted market prices from sources such as the Canadian Gas Price Reporter and the Natural Gas Exchange, independent price publications and over-the-counter broker quotes. The fair value of long-term debt is determined for disclosure purposes only using an income approach. Fair values are estimated using the present value of future cash flows discounted at the market rate of interest for the equivalent Province of Saskatchewan debt instruments. Notional values are an approximation of future undiscounted net cash flows. For physical natural gas contracts, the notional value is based on the contract price. Where contract prices are referenced to an index price that has not yet been fixed, the market price is used to estimate the contract price. As at March 31, 2019 natural gas derivative instruments had the following fair values, notional values and maturities in the next five fiscal years:
(millions) Fair value
2020
2021
2022
2023
2024
Total
1 $ 2 $
24
$ $
15 $ (27) $
8 $ (9) $
(1) $ 1 $
1 $ 1 $
(32)
Notional value
Fair value - increase (decrease) in net income Notional value - estimated undiscounted net cash (outflow) inflow
Financial assets and liabilities are offset within the consolidated statement of financial position if the Corporation has the legal right to offset and intends to settle on a net basis. When natural gas contracts settle or become realized, the amount due to or from counterparties is recorded within trade payables or trade receivables, respectively. The Corporation offsets these amounts when the counterparty and timing of settlement are the same, which reflects the expected future cash flows from settling its natural gas contracts.
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