Air Canada 2011 Annual Report Download - page 133

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2011 Consolidated Financial Statements and Notes
133
As part of these agreements, the Corporation also agreed to extend repayment terms on $22 of receivables, due in 2010, over
six years with annual repayments on a non-interest bearing basis, with such payments subject to satisfaction of certain
conditions. This agreement is now referred to as the Term Note.
As a result of the above agreements, Air Canada’s equity investment in Aveos was recorded at $49, based upon its estimated
fair value, and $2 for legal fees. The Term Note of $22 was recorded at its estimated fair value of $11, based on the present
value of expected cash flows on a discounted basis. Other trade receivables from Aveos of $4 were settled. For accounting
purposes, $34 for consideration of agreement amendments is deferred and will be amortized over the terms of the amended
agreements with Aveos of four years, on average. This accounting treatment recorded in 2010 is summarized as follows:
Share consideration received $ 49
Allocated to:
Term Note $ 11
Trade receivables settled 4
Agreements and contract amendments 34
$49
The investment in Aveos common shares and the Term Note is recorded in Deposits and other assets.