Air Canada 2011 Annual Report Download - page 138

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2011 Air Canada Annual Report
138
25. RECONCILIATION OF PREVIOUS CANADIAN GAAP TO IFRS
For all periods up to and including the year ended December 31, 2010, the Corporation previously prepared its consolidated
financial statements in accordance with Canadian GAAP.
Accordingly, the Corporation has prepared these financial statements which comply with IFRS applicable for periods beginning
on or after January 1, 2011 and the significant accounting policies to meet those requirements are disclosed in Note 3. In
preparing these financial statements, the Corporation started from an opening consolidated statement of financial position as
at January 1, 2010, the Corporation's IFRS transition date, and made those changes in accounting policies and other
adjustments required by IFRS 1 “First-time adoption of international financial reporting standards” (“IFRS 1”). This note
explains the principal adjustments made by the Corporation in transitioning its Canadian GAAP consolidated statement of
financial position at the transition date on January 1, 2010 and its previously published Canadian GAAP financial statements
for the year ended December 31, 2010.
In preparing these financial statements in accordance with IFRS 1, the Corporation has applied the mandatory exceptions and
certain of the optional exemptions from full retrospective application of IFRS.
Exemptions and exceptions applied
IFRS 1 allows first-time adopters certain exemptions from the general requirements contained in IFRS. The Corporation has
elected to apply the following optional exemptions from full retrospective application:
Business combinations;
– The Corporation has elected not to apply IFRS 3 (as amended in 2008) retrospectively to business combinations that
occurred before January 1, 2010, the date of transition to IFRS.
Fair value or revaluation as deemed cost;
– The Corporation has elected to measure owned and finance leased aircraft and engines at January 1, 2010 at fair value
and use that fair value as deemed cost at that date. Under Canadian GAAP, the Corporation applied fresh start
reporting on September 30, 2004. As a result, all consolidated assets and liabilities of Air Canada were reported at fair
values, except for future income taxes. As permitted under IFRS 1, the Corporation has elected to apply those fair
values as deemed cost for IFRS as at the date of the revaluation, with the exception of (i) owned and finance leased
aircraft and engines, which are being measured at fair value as at January 1, 2010 as described above, and (ii)
intangible assets and goodwill, which, in such case, would be measured at historical cost without the application of the
fresh start fair values. Refer to “Fresh start reporting” below for additional information.
Employee benefits;
– The Corporation has elected to recognize all cumulative actuarial gains and losses on pension and other post-
retirement benefit plans as at January 1, 2010 directly in the Deficit. Furthermore the Corporation has elected to
disclose the history of experience gains (losses) related to plan assets and plan liabilities for accounting periods
prospective from the transition date.
Borrowing costs.
– The Corporation has applied IAS 23R for annual periods beginning on or after January 1, 2010, the date of transition to
IFRS. Under Canadian GAAP, the Corporation had an accounting policy of capitalizing interest. Accordingly, the
Corporation did not reverse any previously capitalized borrowing costs recognized under Canadian GAAP.