Sun Life 2012 Annual Report Download - page 103

In December 2011, amendments to IFRS 7 were issued which require additional disclosures about the effects of offsetting financial
assets and financial liabilities and related arrangements. The new disclosures will require entities to disclose gross amounts subject to
rights of set off, amounts set off, and the related net credit exposure. The disclosures are intended to help investors understand the
effect or potential effect of offsetting arrangements on a company’s financial position. The new disclosures are effective for annual
periods beginning on or after January 1, 2013. We do not expect the adoption of these amendments to have a significant impact on our
Consolidated Financial Statements.
In May 2012, the IASB issued Annual Improvements 2009-2011 Cycle, which includes amendments to five IFRSs. The annual
improvements process is used to make necessary but non-urgent changes to IFRS that are not included as part of any other project.
The amendments clarify guidance and wording or make relatively minor amendments to the standards that address unintended
consequences, conflicts or oversights. The amendments issued as part of this cycle must be applied retrospectively and are effective
for annual periods beginning on or after January 1, 2013. We do not expect the adoption of these amendments to have a significant
impact on our Consolidated Financial Statements.
Amended and New International Financial Reporting Standards to be Adopted in 2014
or Later
The following new standards and amendments to existing standards were issued by the IASB and are expected to be adopted by us in
2014 or later.
In December 2011, amendments to IAS 32 Financial Instruments: Presentation were issued to clarify the existing requirements for
offsetting financial assets and financial liabilities. The amendments are effective for annual periods beginning on or after January 1,
2014. We are currently assessing the impact the adoption of these amendments will have on our Consolidated Financial Statements.
In November 2009, IFRS 9 Financial Instruments (“IFRS 9”) was issued and subsequently amended in October 2010. The current IFRS
9, which addresses the classification and measurement of financial assets and liabilities, is the first phase of the project to replace IAS
39 Financial Instruments: Recognition and Measurement. It requires financial assets to be measured at fair value or amortized cost on
the basis of their contractual cash flow characteristics and the entity’s business model for managing the assets. It also changes the
accounting for financial liabilities measured using the fair value option. In December 2011, the effective date was deferred to January 1,
2015. The December amendments also provide relief from the requirements to restate comparative financial statements. We are
currently monitoring the continuing IASB developments and changes relating to this standard and assessing the impact of the adoption
of this standard may have on our Consolidated Financial Statements.
In October 2012, Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) was issued. The amendments apply to
investment entities, which are entities that evaluate the performance of their investments on a fair value basis and whose business
purpose is to invest funds solely for returns from capital appreciation, investment income or both. The amendments provide an
exemption to the consolidation requirements in IFRS 10 for investment entities and require investment entities to measure certain
subsidiaries at fair value through profit or loss rather than consolidate them. The amendments are effective from January 1, 2014 with
early adoption permitted. The exemption from consolidation for investment entities is not retained by a non-investment entity parent,
and as a result, we do not expect the adoption of this standard to have an impact on our Consolidated Financial Statements.
2.B Accounting Adjustment
During 2012, we identified required adjustments for two prior period errors in our Insurance contract liability valuation models within the
Sun Life Financial Canada (“SLF Canada”) and Sun Life Financial United States (“SLF U.S.”) segments. For SLF Canada the error
resulted in an understatement in the cost of reinsurance for our non-participating contracts after tax of $47 of which $16 relates to prior
to January 1, 2011. For SLF U.S. the error resulted in an understatement of projections of the future cost of mortality of $39 after tax.
Adjustments have been made to Reinsurance assets, Deferred tax assets, Insurance contract liabilities and net income. These
adjustments are not material to our Consolidated Financial Statements for each of the prior periods to which they relate, but adjusting
for the cumulative impact of these errors in one reporting period would have materially impacted the results of the 2012 reporting
period. Accordingly, we restated our Consolidated Statements of Operations and Consolidated Statements of Changes in Equity for the
reporting periods to which they apply and our opening Consolidated Statement of Financial Position for the earliest comparative period
presented January 1, 2011.
Notes to Consolidated Financial Statements Sun Life Financial Inc. Annual Report 2012 101