Sun Life 2012 Annual Report Download - page 85

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 million and $182 million
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.
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.
Management’s Discussion and Analysis Sun Life Financial Inc. Annual Report 2012 83