Shaw 2011 Annual Report Download - page 90

Download and view the complete annual report

Please find page 90 of the 2011 Shaw 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 149

  • 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

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]
The net foreign exchange gain (loss) recognized on the translation and settlement of current
monetary assets and liabilities was $4,230 (2010 – $5,563; 2009 – ($1,599)) and is included
in other gains.
Exchange gains and losses on translating hedged and unhedged long-term debt are included in
the Company’s Consolidated Statements of Income and Retained Earnings (Deficit). Foreign
exchange gains and losses on hedging derivatives are reclassified from Other Comprehensive
Income (Loss) to income to offset the foreign exchange adjustments on hedged long-term debt.
Financial instruments other than derivatives
Financial instruments have been classified as loans and receivables, assets available-for-sale,
assets held-for-trading or financial liabilities. Cash and cash equivalents have been classified as
held-for-trading and are recorded at fair value with any change in fair value immediately recognized
in income (loss). Other financial assets are classified as available-for-sale or as loans and
receivables. Available-for-sale assets are carried at fair value with changes in fair value recorded in
other comprehensive income (loss) until realized. Loans and receivables and financial liabilities are
carried at amortized cost. None of the Company’s financial assets are classified as held-to-maturity
and none of its financial liabilities are classified as held-for-trading. Certain private investments
where market value is not readily determinable are carried at cost net of write-downs.
Finance costs, discounts and proceeds on bond forward contracts associated with the issuance
of debt securities and fair value adjustments to debt assumed in business acquisitions are
netted against the related debt instrument and amortized to income using the effective interest
rate method. Accordingly, long-term debt accretes over time to the principal amount that will be
owing at maturity.
Derivative financial instruments
The Company uses derivative financial instruments to manage risks from fluctuations in foreign
exchange rates and interest rates. These instruments include cross-currency interest rate
exchange agreements, foreign currency forward purchase contracts and bond forward contracts.
All derivative financial instruments are recorded at fair value in the balance sheet. Where
permissible, the Company accounts for these financial instruments as hedges which ensures
that counterbalancing gains and losses are recognized in income in the same period. With
hedge accounting, changes in the fair value of derivative financial instruments designated as
cash flow hedges are recorded in other comprehensive income (loss) until the variability of cash
flows relating to the hedged asset or liability is recognized in income (loss). When an
anticipated transaction is subsequently recorded as a non-financial asset, the amounts
recognized in other comprehensive income (loss) are reclassified to the initial carrying amount
of the related asset. Where hedge accounting is not permissible or derivatives are not
designated in a hedging relationship, they are classified as held-for-trading and the changes in
fair value are immediately recognized in income (loss).
Instruments that have been entered into by the Company to hedge exposure to foreign exchange
and interest rate risk are reviewed on a regular basis to ensure the hedges are still effective and
that hedge accounting continues to be appropriate.
86