3. Summary of significant accounting policies (continued)
iii.
Level 3
Inputs are unobservable for the particular assets and liabilities as at the reporting date. The Corporation did not classify any of its fair value measurements within Level 3.
b. Future changes in accounting policies
The following new standards are not yet effective and have not been applied in preparing these consolidated financial statements:
IFRS 9 Financial Instruments – introduces a logical approach for the classification of financial assets driven by cash flow characteristics and the business model in which an asset is held. The new standard also replaces the rule-based hedge accounting requirements in IAS 39 Financial Instruments: Recognition and Measurement to more closely align the accounting with risk management activities. This standard is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. IFRS 15 Revenue from Contracts with Customers – clarifies the principles for recognizing revenue from contracts with customers and will affect the Corporation’s accounting policies with respect to the following applicable revenue standards and interpretations upon its effective date:
IAS 18 Revenue IAS 11 Construction Contracts IFRIC 18 Transfer of Assets from Customers
This standard is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted.
IFRS 16 Leases – broadens the definition of a lease and increases transparency regarding a Corporation’s leasing obligations. Under the new standard, an asset and liability is recognized on the consolidated statement of financial position for all material contracts that meet the definition of a lease. This standard is effective for annual periods beginning on or after January 1, 2019, with early adoption permitted if IFRS 15 Revenue from Contracts with Customers has also been applied. The Corporation is continuing to review the new standards and has completed a preliminary assessment of the impact on its consolidated financial statements for IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers . The anticipated impacts are as follows: IFRS 9 Financial Instruments – under the new financial asset classifications, the Corporation’s debt retirement funds may qualify to be classified as fair value through other comprehensive income. Classification as such would eliminate the recognition of fluctuations in fair value on debt retirement funds in net income, as market value adjustments would be recorded in other comprehensive income. Under the new standard, the Corporation is also evaluating the implementation of hedge accounting for its commodity price risk management strategy. Implementation of hedge accounting would reduce the volatility of market value adjustments for outstanding commodity purchase contracts on net income, as the effective portion of the designated hedging relationships would be reclassified to other comprehensive income. IFRS 15 Revenue from Contracts with Customers – under the new control-based revenue model, the Corporation anticipates minimal impacts to the majority of its revenue streams, but has not yet determined the impact of the new standard to customer capital contribution revenue. Changes to the recognition of customer capital contribution revenue are contingent on the Corporation’s identification of performance obligations within the underlying customer contracts.
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2016-17 SECOND QUARTER REPORT
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