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66 ROGERS COMMUNICATIONS INC. 2007 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(e) The unamortized deferred transitional gain of $54 million at
December 31, 2006, which arose on the change from marked-
to-market accounting to hedge accounting that was calculated
as at July 1, 2004, was eliminated upon adoption, the impact of
which was a decrease to opening deficit of $37 million, net of
income taxes of $17 million.
(f) Effective January 1, 2007, we record all transaction costs for
financial assets and financial liabilities in the Consolidated
Statements of Income as incurred. We had previously deferred
these costs and amortized them over the term of the related
asset or liability. The carrying value of deferred costs at
December 31, 2006, of $39 million, net of income taxes of
$20 million, was charged to opening deficit on transition on
January 1, 2007.
Inventories
In 2007, the CICA issued Handbook Section 3031, Inventories (“CICA
3031”). CICA 3031 aligns Canadian GAAP with International Financial
Reporting Standards (“IFRS”) and establishes the principles for mea-
surement, recognition and disclosure of inventories. We adopted
this new standard effective January 1, 2007, retrospectively without
restatement. The application of this standard did not have a mate-
rial impact on our Consolidated Financial Statements.
RECENT C ANADIAN ACCOUNTING PRONOUNCEMENTS
Financial Instruments
In 2006, the CICA issued Handbook Section 3862, Financial Instru-
ments – Disclosures, and Handbook Section 3863, Financial
Instruments – Presentation. These standards enhance existing dis-
closure requirements and place greater emphasis on disclosures
related to recognized and unrecognized financial instruments
and how those risks are managed. Disclosures required by these
standards will be included in the Company’s interim and annual
financial statements commencing January 1, 2008.
Capital Disclosures
In 2006, the CICA issued Handbook Section 1535, Capital Disclosures
(“CICA 1535”). CICA 1535 requires that an entity disclose information
that enables users of its financial statements to evaluate an entity’s
objectives, policies and processes for managing capital, including
disclosures of any externally imposed capital requirements and
the consequences for non-compliance. Disclosures required by the
new standard will be included in our Interim and Annual Financial
Statements commencing January 1, 2008.
Goodwill and Intangible Assets
In 2008, the CICA issued Handbook Section 3064, Goodwill and
Intangible Assets (“CICA 3064”). CICA 3064, which replaces Section
3062, Goodwill and Intangible Assets, and Section 3450, Research
and Development Costs, establishes standards for the recognition,
measurement and disclosure of goodwill and intangible assets.
The provisions relating to the definition and initial recognition of
intangible assets, including internally generated intangible assets,
are equivalent to the corresponding provisions of IFRS IAS 38,
Intangible Assets. This new standard is effective for our Interim and
Annual Consolidated Financial Statements commencing January 1,
2009. We are assessing the impact of the new standard.
U.S. GAAP DIFFERENCES
We prepare our financial statements in accordance with Canadian
GAAP. U.S. GAAP differs from Canadian GAAP in certain respects.
The areas of principal differences and their impact on our 2007
Audited Consolidated Financial Statements are described in
Note 26 to the 2007 Audited Consolidated Financial Statements.
The significant differences in accounting relate to:
• GainOnSaleandIssuanceofSubsidiarySharestoNon-Controlling
Interest;
• GainonSaleofCableSystems;
• Pre-OperatingCostsCapitalized;
• CapitalizedInterest;
• AcquisitionofCableAtlantic;
• FinancialInstruments;
• Stock-BasedCompensation;
• Pensions;
• IncomeTaxes;
• InstallationRevenuesandCosts;and
• AcquisitionofWireless.
Recent U.S. accounting pronouncements are also discussed in
Note 26 to the 2007 Audited Consolidated Financial Statements.