Shaw 2011 Annual Report Download - page 142

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Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2011, 2010 and 2009
[all amounts in thousands of Canadian dollars except share and per share amounts]
(2) Deferred charges and credits
The excess of equipment costs over equipment revenues are deferred and amortized under
Canadian GAAP. Under US GAAP, these costs are expensed as incurred.
For US GAAP, transaction costs, financing costs and proceeds on bond forward contracts
associated with the issuance of debt securities are recorded as deferred charges and
deferred credits and amortized to income on a straight-line basis over the period to
maturity of the related debt. Under Canadian GAAP, such amounts are recorded as part of
the principal balance of debt and amortized to income using the effective interest rate
method.
(3) Business acquisitions
Effective September 1, 2009, under US GAAP, acquisition related costs are recognized
separately from business combinations, generally as expenses. Effective September 1,
2010 the Company early adopted CICA Handbook section 1582 for Canadian GAAP which
also requires acquisition related costs to be expensed. Until August 31, 2010, acquisition
related costs were included as part of the purchase cost of the business acquisition for
Canadian GAAP.
Under Canadian GAAP, non-controlling interests are recorded at either fair value or their
proportionate share of the fair value of identifiable net assets acquired. The Company
chose to record the non-controlling interests in certain of the subsidiary specialty
channels assumed as part of the broadcasting business acquisition in 2011 at their
proportionate share of the fair value of identifiable net assets acquired. Under US GAAP,
non-controlling interests must be recorded at fair value which was determined using the
enterprise fair value adjusted by 10% to give effect to a control premium.
(4) Equity in loss of investee
The earnings of an investee determined under Canadian GAAP has been adjusted to
reflect US GAAP.
Under Canadian GAAP, the investment in Star Choice was accounted for using the cost
method until CRTC approval was received for the acquisition. When the Company received
CRTC approval, the amount determined under the cost method became the basis for the
purchase price allocation and equity accounting commenced. Under US GAAP, equity
accounting for the investment was applied retroactively to the date the Company first
acquired shares in Star Choice.
(5) Gain on sale of subsidiary
In 1997, the Company acquired a 54% interest in Star Choice in exchange for the shares
of HomeStar Services Inc., a wholly-owned subsidiary at that time. Under Canadian
138