Air Canada 2012 Annual Report Download - page 138

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2012 Air Canada Annual Report
138
Following is a classification of fair value measurements recognized in the Consolidated Statement of Financial Position using a
fair value hierarchy that reflects the significance of the inputs used in making the measurements.
Fair value measurements at reporting date using:
December 31, 2012
Quoted prices in
active markets for
identical assets
(Level 1)
Significant other
observable inputs
(Level 2)
Significant
unobservable
inputs (Level 3)
Financial Assets
Held-for-trading securities
Cash equivalents $ 218 $– $218 $ –
Short-term investments 1,268 – 1,268 –
Deposits and other assets
Prepayment option on senior secured notes 15 – – 15
Derivative instruments
Fuel derivatives 16 – 16 –
Share forward contracts 10 – 10 –
Foreign exchange derivatives – – – –
Interest rate swaps 13 – 13 –
Total $ 1,540 $– $1,525 $ 15
Financial assets held by financial institutions in the form of cash and restricted cash have been excluded from the fair value
measurement classification table above as they are not valued using a valuation technique.
The change in level 3 assets in 2012 related to a gain of $4 in non-operating income (expense) for ABCP described below.
(2011 – $5 expense). Also, the prepayment options within the senior secured notes, which are considered embedded
derivatives, were assessed at a fair value of $15 in favour of the Corporation (2011 – negligible).
Asset Backed Commercial Paper (“ABCP”)
In 2012, the Corporation sold its remaining investment in non-bank sponsored ABCP for proceeds of $28. The carrying value
was $24 (net of a fair value adjustment of $13). The Corporation recorded a gain of $4 in non-operating income (2011 – $5
charge for a fair value adjustment).