Shaw 2013 Annual Report Download - page 77

S
haw
C
ommunications Inc
.
N
O
TE
S
T
OCO
N
SO
LIDATED FINAN
C
IAL
S
TATEMENT
S
August 31, 2013 and 201
2
[all amounts in millions of Canadian dollars exce
p
t share and
p
er share amounts
]
(
i) Asset retirement obli
g
ations
The Company recognizes the fair value of a liability for an asset retirement obligation in the
p
er
i
od
i
nwh
i
ch
i
t
i
s
i
ncurred, on a d
i
scounted bas
i
s, w
i
th a corres
p
ond
i
n
gi
ncrease to the
carrying amount of property and equipment, primarily in respect of transmitter sites. This cos
t
is amortized on the same basis as the related asset. The liability is subsequently increased for
t
he
p
assa
g
eo
f
t
i
me and the accret
i
on
i
s recorded
i
n the
i
ncome statement as accret
i
on o
f
lon
g
-
t
erm liabilities and provisions. The discount rates applied are subsequently adjusted to curren
t
rates as re
q
uired at the end of re
p
ortin
gp
eriods. Revisions due to the estimated timin
g
of cash
f
lows or the amount re
q
u
i
red to settle the obl
ig
at
i
on ma
y
result
i
nan
i
ncrease or decrease
in
t
he liability. Actual costs incurred upon settlement of the obligation are charged against th
e
liabilit
y
to the extent recorded.
(ii) O
ther prov
i
s
i
ons
P
rov
i
s
i
ons
f
or d
i
sputes, legal cla
i
ms and cont
i
ngenc
i
es are recogn
i
zed when warranted. Th
e
Company establishes provisions after taking into consideration legal assessments (i
f
a
pp
l
i
cable
)
,ex
p
ected ava
i
lab
i
l
i
t
y
o
fi
nsurance or other recourse and other ava
i
lable
i
n
f
ormat
i
on.
D
efe
rr
ed c
r
ed
i
ts
D
eferred credits primarily include: (i) prepayments received under IRU agreements amortize
d
o
n a stra
ig
ht-l
i
ne bas
i
s
i
nto
i
ncome over the term o
f
the a
g
reement;
(ii)
e
q
u
ip
ment revenue, a
s
d
escr
i
bed
i
n the revenue and expenses account
i
ng pol
i
cy, de
f
erred and amort
i
zed over two
years to five years; (iii) connection fee revenue and upfront installation revenue, as described in
t
he revenue and ex
p
enses account
i
n
gp
ol
i
c
y
,de
f
erred and amort
i
zed over two to ten
y
ears;
(i
v
)a
d
epos
i
tona
f
uture
fi
bre sale; and
(
v
)
amounts rece
i
ved
i
n respect o
f
grant
i
ng an opt
i
on to
acquire its wireless spectrum licenses.
I
n
co
m
eta
x
es
The
C
ompany accounts
f
or
i
ncome taxes us
i
ng the l
i
ab
i
l
i
ty method, whereby de
f
erred
i
ncome
t
ax assets and liabilities are determined based on differences between the financial reporting
and tax bases o
f
assets and l
i
ab
i
l
i
t
i
es measured us
i
n
g
substant
i
vel
y
enacted tax rates and law
s
t
hat w
i
ll be
i
ne
ff
ect when the d
iff
erences are expected to reverse. De
f
erred tax assets an
d
liabilities are offset if there is a legally enforceable right to offset and they relate to incom
e
t
axes lev
i
ed b
y
the same author
i
t
yi
n the same taxable ent
i
t
y
. Income tax ex
p
ense
f
or the
p
er
i
od
i
s the tax payable
f
or the per
i
od us
i
ng tax rates substant
i
vely enacted at the report
i
ng date, any
adjustments to taxes payable in respect of previous years and any change during the period i
n
d
e
f
erred
i
ncome tax assets and l
i
ab
i
l
i
t
i
es, exce
p
t to the extent that the
y
relate to a bus
i
ness
comb
i
nat
i
on or d
i
vestment,
i
tems recogn
i
zed d
i
rectly
i
n equ
i
ty or
i
n other comprehens
i
v
e
income. The Company records interest and penalties related to income taxes in income tax
e
x
pense
.
Tax credits and
g
overnment
g
rant
s
The Company has access to a government program which supports local programming produce
d
b
y
convent
i
onal telev
i
s
i
on stat
i
ons. In add
i
t
i
on, the
C
om
p
an
y
rece
i
ves tax cred
i
ts
p
r
i
mar
i
l
y
related to
i
ts research and development act
i
v
i
t
i
es.
G
overnment
fi
nanc
i
al ass
i
stance
is
7
3