Telus 2011 Annual Report Download - page 116

112 . TELUS 2011 ANNUAL REPORT
1SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Summary review of accounting policies and principles and the methods used
in their application by the Company
The accompanying consolidated financial statements are expressed in
Canadian dollars. The generally accepted accounting principles (GAAP)
used by TELUS are International Financial Reporting Standards as issued
by the International Accounting Standards Board and these consolidated
financial statements comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board
(IFRS-IASB) and Canadian generally accepted accounting principles.
The consolidated financial statements of TELUS for the years ended
December 31, 2011 and 2010, were authorized by TELUS’s Board of
Directors for issue on February 23, 2012.
(a) Consolidation
The consolidated financial statements include the accounts of the
Company and all of the Company’s subsidiaries, of which the princi-
pal one is TELUS Communications Inc. Currently, through the TELUS
Communications Company partnership and the TELE-MOBILE
COMPANY partnership, TELUS Communications Inc. includes sub-
stantially all of the Company’s Wireline segment’s operations and
substantially all of the Wireless segment’s operations. With the exception
of non-controlling interests in an immaterial subsidiary held for sale,
all of the Company’s subsidiaries are wholly owned.
The financing arrangements of the Company and all of its subsidiaries
do not impose restrictions on inter-corporate dividends.
On a continuing basis, TELUS reviews its corporate organization
and effects changes as appropriate so as to enhance its value.
This process can, and does, affect which of the Company’s subsidiaries
are considered principal subsidiaries at any particular point in time.
(b) Use of estimates and judgements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates, assumptions and judgements that affect: the reported
amounts of assets and liabilities at the date of the financial statements;
the disclosure of contingent assets and liabilities at the date of the
financial statements; and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Estimates
Examples of significant estimates and assumptions include:
.the allowance for doubtful accounts;
.the allowance for inventory obsolescence;
.the estimated useful lives of assets;
.the recoverability of tangible assets;
.the recoverability of intangible assets with indefinite lives;
.the recoverability of goodwill;
.the recoverability of long-term investments;
.the amount and composition of income tax assets and income tax
liabilities, including the amount of unrecognized tax benefits; and
.certain actuarial and economic assumptions used in determining
defined benefit pension costs, accrued pension benefit obligations
and pension plan assets.
Judgements
Examples of significant judgements, apart from those involving
estimation, include:
.The Company’s choice to depreciate and amortize its property, plant,
equipment and intangible assets subject to amortization on a straight-
line basis as it believes that this method reflects the consumption
of resources related to the economic lifespan of those assets better
than an accelerated method and is more representative of the
economic substance of the underlying use of those assets.
.The Company’s view that its spectrum licences granted by Industry
Canada will likely be renewed by Industry Canada; that the Company
intends to renew them; and that the Company believes it has the
financial and operational ability to renew them and, thus, they are
deemed to have an indefinite life, as discussed further in Note 16(c).