Telus 2010 Annual Report Download - page 77

TELUS 2010 annual report . 73
MANAGEMENT’S DISCUSSION & ANALYSIS: 8
8.1 Critical accounting estimates
TELUS’ significant accounting policies are described in Note 1 of the
Consolidated financial statements. The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates. Management’s estimates affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, as well
as the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. The Company’s
critical accounting estimates are described below and are generally
discussed with the Audit Committee each quarter, and refer to Canadian
GAAP and IFRS-IASB where noted.
General
.The Company has considered in determining its critical accounting
estimates, trends, commitments, events or uncertainties that it
reasonably expects to materially affect the methodology or assump-
tions, subject to the items identified in the Caution regarding
forward-looking statements section of this MD&A.
.In the normal course, changes are made to assumptions underlying
all critical accounting estimates to reflect current economic conditions,
updating of historical information used to develop the assumptions
and changes in the Company’s credit ratings, where applicable.
Unless otherwise specified in the discussion of the specific critical
accounting estimates, it is expected that no material changes in
overall financial performance and financial statement line items would
arise either from reasonably likely changes in material assumptions
underlying the estimate or from selection of a different estimate from
within a valid range of estimates.
.All critical accounting estimates are uncertain at the time of making
the estimate and affect the following Consolidated statements of
income and other comprehensive income line items: Income taxes
(except for estimates about goodwill) and Net income. Similarly, all
critical accounting estimates affect the following Consolidated state-
ments of financial position line items: Current assets (Income and
other taxes receivable); Current liabilities (Income and other taxes
payable and Current portion of future income taxes (as currently
reported)); Future income tax liabilities (Deferred income tax liabilities
under IFRS-IASB); and Common Share and Non-Voting Share
equity (retained earnings). The discussion of each critical accounting
estimate does not differ between the Company’s two segments,
wireless and wireline, unless explicitly noted.
.For fiscal year 2010, critical accounting estimates affected line items
on the Consolidated statements of income and other comprehensive
income, and line items on the Consolidated statements of financial
position, as follows:
8
CRITICAL ACCOUNTING ESTIMATES AND ACCOUNTING POLICY
DEVELOPMENTS
Accounting estimates that are critical to determining financial results; and a summary
of differences arising because of the convergence of Canadian GAAP with International
Financial Reporting Standards as issued by the International Accounting Standards
Board (IFRS-IASB), including unaudited pro forma quantified transition effects
Consolidated statements of income and other comprehensive income
Operating expenses
Operating Amortization of Other
Consolidated statements of financial position revenues Operations Depreciation intangible assets expense, net
Accounts receivable X
Inventories X
Property, plant and equipment, net X
Intangible assets, net, and Goodwill, net(1) X
Investments X
Price cap deferral account
Advance billings and customer deposits X
Other long-term liabilities X
Employee defined benefit pension plans X X(2) X(2)
(1) Accounting estimate, as applicable to intangible assets with indefinite lives and goodwill, primarily affects the Company’s wireless segment.
(2) Accounting estimate impact due to internal labour capitalization rates.