Shaw 2013 Annual Report Download - page 33

S
haw
C
ommunications Inc
.
MANA
G
EMENT’
S
DI
SCUSS
I
O
N AND ANALY
S
I
S
August
31
,
2013
vi)
Asset
i
m
p
a
i
rmen
t
The Company tests goodwill and indefinite-life intangibles for impairment annually (as at
M
arch 1) and when events or changes in circumstances indicate that the carrying value may be
i
m
p
a
i
red. The recoverable amount o
f
each cash-
g
enerat
i
n
g
un
i
t
(“CG
U”
)i
s determ
i
ned base
d
o
n the higher of the CGU’s fair value less costs to sell and its value in use. A CGU is th
e
smallest identifiable
g
rou
p
of assets that
g
enerate cash flows that are inde
p
endent of the cash
i
n
f
lows
f
rom other assets or
g
rou
p
so
f
assets. The
C
om
p
an
y
’s cash
g
enerat
i
n
g
un
i
ts ar
e
consistent with its reporting segments, Cable, Satellite and Media. Where the recoverabl
e
amount of the CGU is less than its carrying amount, an impairment loss is recognized.
I
m
p
a
i
rment losses relat
i
n
g
to
g
oodw
i
ll cannot be reversed
i
n
f
uture
p
er
i
ods. The results o
f
th
e
impairment tests are provided in Note 10 to the Consolidated Financial Statements.
v
ii) Em
p
lo
y
ee benefit
p
lan
s
As at Au
g
ust 31, 2013, Shaw had non-re
g
istered defined benefit
p
ension
p
lans for ke
y
senior
execut
i
ves and des
ig
nated execut
i
ves and var
i
ous re
gi
stered de
fi
ned bene
fi
t
p
lans
f
or certa
in
u
nionized and non-unionized employees. The amounts reported in the financial statement
s
relatin
g
to the defined benefit
p
ension
p
lans are determined usin
g
actuarial valuations that are
based on several assum
p
t
i
ons
i
nclud
i
n
g
the d
i
scount rate and rate o
f
com
p
ensat
i
on
i
ncrease.
W
hile the Company believes these assumptions are reasonable, differences in actual results o
r
chan
g
es in assum
p
tions could affect em
p
lo
y
ee benefit obli
g
ations and the related incom
e
statement
i
m
p
act. The d
iff
erences between actual and assumed results are
i
mmed
i
atel
y
recognized in other comprehensive income/loss. The most significant assumption used t
o
calculate the net em
p
lo
y
ee benefit
p
lan ex
p
ense is the discount rate. The discount rate is the
i
nterest rate used to determ
i
ne the
p
resent value o
f
the
f
uture cash
f
lows that
i
sex
p
ected w
i
ll
be needed to settle employee benefit obligations and is also used to calculate the interest
income on
p
lan assets. It is based on the
y
ield of lon
g
-term, hi
g
h-
q
ualit
y
cor
p
orate fixed income
i
nvestments closel
y
match
i
n
g
the term o
f
the est
i
mated
f
uture cash
f
lows and
i
s rev
i
ewed an
d
adjusted as changes required. The following table illustrates the increase on the accrue
d
benefit obli
g
ation and
p
ension ex
p
ense of a 1% decrease in the discount rate:
A
cc
r
ued
B
e
n
efit
O
bligation a
t
End of Fiscal 201
3
Pension Expens
e
Fiscal 201
3
We
ig
hted Avera
g
eD
i
scount Rate – Non-re
gi
stered Plans 4.75
%
4.4
9%
Weighted Average Discount Rate – Registered Plans 4.84% 4.67%
Im
p
act o
f
:
1%
decreas
e
(
$million
s
)
– Non-re
g
istered Plans $ 68 $
6
Impact o
f
:
1%
decreas
e
($
million
s
)
– Registered Plans
$
25
$
3
v
iii
)
Deferred income taxe
s
The
C
om
p
an
y
has reco
g
n
i
zed de
f
erred
i
ncome tax assets and l
i
ab
i
l
i
t
i
es
f
or the
f
uture
i
ncom
e
t
ax consequences attributable to differences between the financial statement carrying amount
s
o
f assets and liabilities and their res
p
ective tax bases. Deferred tax assets are also reco
g
nized in
res
p
ect o
f
the
C
om
p
an
y
’s losses and losses o
f
certa
i
no
fi
ts subs
i
d
i
ar
i
es. The de
f
erred
i
ncom
e
t
ax assets and liabilities are measured using enacted or substantially enacted tax rates expecte
d
t
oa
pp
l
y
to taxable income in the
y
ears in which the tem
p
orar
y
differences are ex
p
ected t
o
reverse or the tax losses are ex
p
ected to be ut
i
l
i
zed. Real
i
zat
i
on o
f
de
f
erred
i
ncome tax assets
i
s
d
ependent upon generating sufficient taxable income during the period in which the temporary
d
ifferences are deductible. The Com
p
an
y
has evaluated the likelihood of realization of deferre
d
29