Shaw 2013 Annual Report Download - page 79

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
]
Fair value measurement
s
F
a
i
r value est
i
mates are made at a s
p
ec
ifi
c
p
o
i
nt
i
nt
i
me, based on relevant market
i
n
f
ormat
i
o
n
and information about the financial instrument. These estimates are subjective in nature and
involve uncertainties and matters of si
g
nificant
j
ud
g
ement and, therefore, cannot be
d
eterm
i
ned w
i
th
p
rec
i
s
i
on.
C
han
g
es
i
n assum
p
t
i
ons could s
ig
n
ifi
cantl
y
a
ff
ect the est
i
mates
.
The fair value hierarch
y
is based on in
p
uts to valuation techni
q
ues that are used to measure fair
value that are e
i
ther observable or unobservable.
O
bservable
i
n
p
uts re
f
lect assum
p
t
i
ons marke
t
participants would use in pricing an asset or liability based on market data obtained fro
m
inde
p
endent sources while unobservable in
p
uts reflect a re
p
ortin
g
entit
y
’s
p
ricin
g
based u
p
o
n
t
he
i
r own market assum
p
t
i
ons
.
The fair value hierarch
y
consists of the followin
g
three levels:
L
evel 1 Inputs are quoted prices in active markets for identical assets or liabilities.
L
evel
2
In
p
uts
f
or the asset or l
i
ab
i
l
i
t
y
are based on observable market data, e
i
ther d
i
rectl
y
o
r
indirectly, other than quoted prices.
L
evel
3
In
p
uts
f
or the asset or l
i
ab
i
l
i
t
y
are not based on observable market data.
Employee bene
f
it
s
The Com
p
an
y
accrues its obli
g
ations under its em
p
lo
y
ee benefit
p
lans, net of
p
lan assets. The
cost o
fp
ens
i
ons and other ret
i
rement bene
fi
ts earned b
y
certa
i
nem
p
lo
y
ees
i
s actuar
i
all
y
d
etermined using the projected benefit method pro-rated on service and management’s best
estimate of salar
y
escalation and retirement a
g
es of em
p
lo
y
ees. Past service costs from
p
lan
i
n
i
t
i
at
i
on and amendments are reco
g
n
i
zed
i
mmed
i
atel
yi
n the
i
ncome statement
.
R
emeasurements include actuarial gains or losses and the return on plan assets (excluding
interest income). Actuarial
g
ains and losses occur because assum
p
tions about benefit
p
lan
s
relate to a lon
g
t
i
me
f
rame and d
iff
er
f
rom actual ex
p
er
i
ences. These assum
p
t
i
ons are rev
i
se
d
based on actual experience of the plans such as changes in discount rates, expected retirement
a
g
es and
p
ro
j
ected salar
y
increases. Remeasurements are reco
g
nized in other com
p
rehensiv
e
i
ncome
(
loss
)
on an annual bas
i
s, at a m
i
n
i
mum, and on an
i
nter
i
m bas
i
s when there ar
e
significant changes in assumptions.
Au
g
ust
31 i
s the measurement date
f
or the
C
om
p
an
y
’s em
p
lo
y
ee bene
fi
t
p
lans. The las
t
actuarial valuations for funding purposes for the various plans were performed effective
D
ecember 31, 2012 and the next actuarial valuations for fundin
gp
ur
p
oses are effective
D
ecember
31
,
2013
.
S
hare-based com
p
ensatio
n
The Com
p
an
y
has a stock o
p
tion
p
lan for directors, officers, em
p
lo
y
ees and consultants to the
C
om
p
an
y
. The o
p
t
i
ons to
p
urchase shares must be
i
ssued at not less than the
f
a
i
r value at the
d
ate of grant. Any consideration paid on the exercise of stock options, together with any
contributed sur
p
lus recorded at the date the o
p
tions vested, is credited to share ca
p
ital. The
C
om
p
an
y
calculates the
f
a
i
r value o
f
share-based com
p
ensat
i
on awarded to em
p
lo
y
ees us
i
n
g
t
he Black-Scholes option pricing model. The fair value of options are expensed and credited t
o
contributed sur
p
lus over the vestin
gp
eriod of the o
p
tions usin
g
the
g
raded vestin
g
method.
75