Sun Life 2012 Annual Report Download - page 102

2. Changes in Accounting Policies and Adjustments
2.A Amended and New International Financial Reporting Standards
Amended International Financial Reporting Standards Adopted in 2012
The following amendments to existing standards were issued by the IASB and adopted by us in the current year.
In October 2010, IFRS 7 Financial Instruments: Disclosures (“IFRS 7”) was amended to revise the disclosures related to transfers of
financial assets. The revised disclosures will help users of financial statements evaluate the risk exposures relating to transfers of
financial assets and the effect of those risks on an entity’s financial position and provide transparency in the reporting of these
transactions, particularly those that involve securitization of financial assets. The adoption of these amendments did not have a
material impact on our Consolidated Financial Statements.
In December 2010, IAS 12 Income Taxes was amended regarding deferred tax and the recovery of underlying assets. The
amendments provide an approach for measuring deferred tax liabilities and deferred tax assets when investment properties are
measured at fair value. These amendments were effective on January 1, 2012. The adoption of these amendments did not have a
material impact on our Consolidated Financial Statements as these amendments are consistent with our current accounting policy.
Amended and New International Financial Reporting Standards to be Adopted in 2013
The following new standards and amendments to existing standards were issued by the IASB and are expected to be adopted by us in 2013.
In May 2011, IFRS 10 Consolidated Financial Statements (“IFRS 10”) was issued, which replaces the consolidation guidance in IAS 27
Consolidated and Separate Financial Statements (“IAS 27”) and SIC-12 Consolidation-Special Purpose Entities. It defines the principle
of control, establishes control as the basis for determining which entities are consolidated, and sets out the requirements for the
preparation of consolidated financial statements. Under the standard, an investor controls an investee when it has power over the
investee, exposure or rights to variable returns from its involvement with the investee, and the ability to use its power over the investee
to affect the amount of the investor’s returns. IFRS 10 is effective for annual periods beginning on or after January 1, 2013. We are
currently assessing the impact that this standard may have on our Consolidated Financial Statements. We have not yet concluded on
how IFRS 10 should be applied to the mutual funds within our segregated funds. Specific issues under discussion and interpretation
internationally related to segregated funds include how to assess variable returns, how the level of legal segregation of a segregated
fund would influence the consolidation assessment, and the presentation of a segregated fund on the consolidated financial statements
if it is concluded that a fund should be consolidated. Since specific application issues are still being evaluated, we cannot reasonably
estimate the impact, if any, that the adoption of this standard will have on our Consolidated Financial Statements in 2013.
In May 2011, IFRS 11 Joint Arrangements (“IFRS 11”) was issued which replaces IAS 31 Interests in Joint Ventures. It requires a party
to a joint arrangement to determine the type of arrangement in which it is involved by assessing its rights and obligations from the
arrangement. It eliminates the option to use the proportionate consolidation method for joint ventures and requires that the equity
method be applied to account for our investment in these entities. This standard is effective for annual periods beginning on or after
January 1, 2013. We do not expect the adoption of this standard to have a material impact on our Consolidated Financial Statements.
In May 2011, IFRS 12 Disclosure of Interests in Other Entities (“IFRS 12”) was issued, which applies to entities that have an interest in
a subsidiary, a joint arrangement, an associate or an unconsolidated structured entity. IFRS 12 requires that an entity disclose
information that enables users of financial statements to evaluate the nature of, and risks associated with, its interests in other entities
and to evaluate the effects of those interests on its financial position, financial performance and cash flows. We will include these
disclosures on our 2013 Consolidated Financial Statements.
In June 2012, the IASB issued Consolidated Financial Statements,Joint Arrangements and Disclosure of Interests in Other Entities:
Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12). The amendments clarify the transition guidance in IFRS 10 and
provide transitional relief for IFRS 10, IFRS 11 and IFRS 12 by limiting the comparative information requirements to only the preceding
comparative period and by removing certain disclosure requirements for the comparative periods from IFRS 12. The effective date of
these amendments is January 1, 2013, consistent with IFRS 10, 11 and 12 and we will apply these amendments when we adopt those
standards in 2013.
As a result of the issuance of IFRS 10, IFRS 11 and IFRS 12, both the current IAS 27 and IAS 28 Investments in Associates (“IAS 28”)
were amended. The requirements related to separate financial statements will remain in IAS 27 while the requirements related to
consolidated financial statements are replaced by IFRS 10. The disclosure requirements currently in IAS 28 are replaced with IFRS 12.
The amendments are effective for annual periods beginning on or after January 1, 2013. The amendments to IAS 27 and IAS 28 are
not expected to have a material impact on our Consolidated Financial Statements.
In May 2011, IFRS 13 Fair Value Measurement was issued (“IFRS 13”). IFRS 13 defines fair value and sets out a single framework for
measuring fair value when fair value is required by other IFRS standards. It also requires disclosures about fair value measurements
and expands fair value disclosures to include non-financial assets. This standard is effective for quarterly and annual periods beginning
on or after January 1, 2013. The adoption of IFRS 13 will result in additional disclosures but is not expected to have a material impact
on our Consolidated Financial Statements.
In June 2011, IAS 19 Employee Benefits was amended. Under the amended standard, actuarial gains and losses will no longer be
deferred or recognized in profit or loss, but will be recognized immediately in other comprehensive income. Past service costs will be
recognized in the period of a plan amendment and the annual expense for a funded plan will include net interest expense or income
using the discount rate applied to the net defined benefit asset or liability. The amendments also require changes to the presentation in
the Consolidated Financial Statements and enhanced disclosures for defined benefit plans. This amended standard is effective for
annual periods beginning on or after January 1, 2013. The impact of adoption on January 1, 2013 will decrease retained earnings and
OCI by $28 and $182 respectively in our Consolidated Financial Statements.
In June 2011, IAS 1 Presentation of Financial Statements was amended regarding the presentation of items in OCI. The amendments
require separate presentation within OCI of items that are potentially reclassifiable to profit or loss subsequently and those that will not
be reclassified to profit or loss. The amendments are effective for annual periods beginning on or after July 1, 2012. We will include
these presentation amendments on our 2013 Consolidated Financial Statements.
100 Sun Life Financial Inc. Annual Report 2012 Notes to Consolidated Financial Statements