Rogers 2015 Annual Report Download - page 124

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
One of our joint ventures has a non-controlling interest that has a
right to require our joint venture to purchase that non-controlling
interest at a future date at fair value. During 2015, we recognized a
$72 million loss (2014 – nil) relating to our share of the change in
the fair value of this obligation (see note 11).
NOTE 18: OTHER LONG-TERM ASSETS
As at December 31
(In millions of dollars) 2015 2014
Spectrum licence deposits –250
Other 150 106
Total other long-term assets 150 356
As at December 31, 2014, we had total deposits of $250 million for
the option to purchase Shaw’s Advanced Wireless Services (AWS)
spectrum licences. In 2015, we received regulatory approval for this
transaction to proceed and we acquired the related spectrum
licences (see note 8).
NOTE 19: SHORT-TERM BORROWINGS
We participate in an accounts receivable securitization program
with a Canadian financial institution that allows us to sell certain
trade receivables into the program. As at December 31, 2015, the
proceeds of the sales were committed up to a maximum of
$1,050 million (2014 – $900 million). Effective January 1, 2015, we
amended the terms of the accounts receivable securitization
program, increasing the maximum potential proceeds under the
program from $900 million to $1,050 million and extending the
term of the program from December 31, 2015 to January 1, 2018.
We received funding of $294 million and repaid $336 million
(2014 – received funding of $276 million and repaid $84 million),
under the program in 2015. We continue to service and retain
substantially all of the risks and rewards relating to the accounts
receivables we sold, and therefore, the receivables remain
recognized on our Consolidated Statements of Financial Position
and the funding received is recognized as short-term borrowings.
The buyer’s interest in these trade receivables ranks ahead of our
interest. The program restricts us from using the receivables as
collateral for any other purpose. The buyer of our trade receivables
has no claim on any of our other assets.
As at December 31
(In millions of dollars) 2015 2014
Trade accounts receivable sold to buyer as
security 1,359 1,135
Short-term borrowings from buyer (800) (842)
Overcollateralization 559 293
We incurred interest costs of $15 million in 2015 (2014 –
$14 million) which we recognized in finance costs.
NOTE 20: PROVISIONS
ACCOUNTING POLICY
We recognize a provision when a past event creates a legal or
constructive obligation that can be reasonably estimated and is
likely to result in an outflow of economic resources. We recognize a
provision even when the timing or amount of the obligation may
be uncertain.
Decommissioning and restoration costs
We use network and other assets on leased premises in some of
our business activities. We expect to exit these premises in the
future and therefore make provisions for the costs associated with
decommissioning the assets and restoring the locations to their
original standards when we have a legal or constructive obligation
to do so. We calculate these costs based on a current estimate of
the costs that will be incurred, project those costs into the future
based on management’s best estimates of future trends in prices,
inflation, and other factors, and discount them to their present
value. We revise our forecasts when business conditions or
technological requirements change.
When we recognize a decommissioning liability, we recognize a
corresponding asset in property, plant and equipment and
depreciate the asset based on the corresponding asset’s useful life
following our depreciation policies for property, plant and
equipment. We recognize the accretion of the liability as a charge
to finance costs on the Consolidated Statements of Income.
Restructuring
We make provisions for restructuring when we have approved a
detailed and formal restructuring plan and either the restructuring
has started or management has announced the plan’s main
features to the employees affected by it. Restructuring obligations
that have uncertain timing or amounts are recognized as
provisions; otherwise they are recognized as accrued liabilities. All
charges are recognized in restructuring, acquisition and other on
the Consolidated Statements of Income (see note 9).
Onerous contracts
We make provisions for onerous contracts when the unavoidable
costs of meeting our obligation under a contract exceed the
benefits we expect to realize from it. We measure these provisions
atthepresentvalueoftheloweroftheexpectedcostof
terminating the contract or the expected cost of continuing with
the contract. We recognize any impairment loss on the assets
associatedwiththecontractbeforewemaketheprovision.
122 ROGERS COMMUNICATIONS INC. 2015 ANNUAL REPORT