Air Canada 2008 Annual Report Download - page 140

Download and view the complete annual report

Please find page 140 of the 2008 Air Canada annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

2008 Air Canada Annual Report
140
Financial Instrument Fair Values in the Consolidated Statement of Financial Position
The carrying amounts reported in the Consolidated Statement of Financial Position for short term financial assets and
liabilities, which includes Accounts receivable and Accounts payable, approximate fair values due to the immediate or short-
term maturities of these financial instruments. Cash equivalents, Short-term investments, and Collateral deposits for fuel
derivatives are classified as held for trading and therefore are recorded at fair value.
The carrying amounts of interest rate swaps, foreign exchange, and fuel derivatives are equal to fair value, which is based on
the amount at which they could be settled based on estimated current market rates.
Management estimated the fair value of its long-term debt based on valuation techniques taking into account market rates
of interest, the current tightness in credit markets and current estimated credit margins applicable to the Corporation based
on recent transactions. The recent decreases in market rates of interest offset any increase in credit margins observed in
recent transactions such that the fair value of the Corporation’s long-term debt approximates its carrying value of $5,354.
AssetBackedCommercialPaper(“ABCP”)
The Corporation has $37 ($29 net of a fair value adjustment) in non-bank sponsored ABCP which has been recorded in
Deposits and other assets. The carrying value as at December 31, 2008 is based on a number of assumptions as to the
fair value of the investments including factors such as estimated cash flow scenarios and risk adjusted discount rates.
The assumptions used in estimating the fair value of the investments are subject to change, which may result in further
adjustments to non-operating results in the future. No adjustments to the carrying value were recorded during 2008.