Shaw 2014 Annual Report Download - page 79

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Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2014 and 2013
[all amounts in millions of Canadian dollars except share and per share amounts]
Tax credits and government grants
The Company has access to a government program which supports local programming produced
by conventional television stations. In addition, the Company receives tax credits primarily
related to its research and development activities. Government financial assistance is
recognized when management has reasonable assurance that the conditions of the government
programs are met and accounted for as a reduction of related costs, whether capitalized and
amortized or expensed in the period the costs are incurred.
Foreign currency translation
Transactions originating in foreign currencies are translated into Canadian dollars at the
exchange rate at the date of the transaction. Monetary assets and liabilities are translated at the
period-end rate of exchange and non-monetary items are translated at historic exchange rates.
The net foreign exchange loss recognized on the translation and settlement of current monetary
assets and liabilities was $8 (2013 – $3) and is included in other losses.
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 has been classified as held-for-trading and is
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. Available-for-sale equity instruments not quoted in
an active market and where fair value cannot be reliably measured are recorded at cost less
impairment. 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.
Finance costs and discounts associated with the issuance of debt securities 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, such as foreign currency forward purchase
contracts, to manage risks from fluctuations in foreign exchange rates. All derivative financial
instruments are recorded at fair value in the statement of financial position. 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).
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