Air Canada 2011 Annual Report Download - page 141

Download and view the complete annual report

Please find page 141 of the 2011 Air Canada annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 150

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150

2011 Consolidated Financial Statements and Notes
141
Reconciliation of the Consolidated Statement of Comprehensive Income (Loss) as previously reported under
Canadian GAAP to IFRS
Year ended December 31, 2010
(Canadian dollars in millions) Canadian GAAP Adjustment IFRS
Comprehensive income (loss)
Net income (loss) for the year $ 107 $ (131) $(24)
Other comprehensive income, net of taxes:
Net gain on employee benefit liabilities Note ii – 580 580
Reclassification of net realized losses on fuel
derivatives to income 184 184
184 580 764
Total comprehensive income $291 $ 449 $740
Explanation of adjustments restating equity from Canadian GAAP to IFRS
i) Principles of Consolidation
Accounting policy differences
Under Canadian GAAP, consolidation is based on a controlling financial interest model. For variable interest entities,
consolidation is based on an analysis of the primary beneficiary. For non-variable interest entities, consolidation of an entity is
based on the continuing power to govern the financial and operating policies of an entity so as to obtain benefits from its
activities and be exposed to related risks. Non-controlling interest is initially measured at the non-controlling shareholders’
interest in the historical cost of the subsidiary’s net assets. Non-controlling interest is presented outside of liabilities and
equity on the balance sheet and as a reduction to net income on the income statement.
Under IFRS, consolidation is based on a control model. Control is the power to govern the financial and operating policies of
an entity so as to obtain benefits from its activities. This control model also applies to interests in special purpose entities.
Non-controlling interest is initially measured at either the non-controlling shareholders’ fair value or at the non-controlling
shareholders’ interest’s proportionate share of the net identifiable assets of the subsidiary. Non-controlling interest is
presented as a component of equity separate from the equity from the owners of the parent on the balance sheet and net
income and comprehensive income attributable to the owners of the parent.
Impact
Certain special purpose entities (“SPEs”) that were not consolidated under Canadian GAAP, as the Corporation was
determined not to be the primary beneficiary, are consolidated under IFRS based on judgements applied. This relates to
aircraft leasing entities covering seven A319 aircraft, six A340 aircraft and eight A330 aircraft.
The impact arising from the change is summarized as follows:
Consolidated Statement of Financial Position
– This adjustment increased Property and equipment by $212 (based upon the fair value of the aircraft as at January 1,
2010 and included in the IFRS 1 Property and equipment impacts further discussed below), an increase to Long-term
debt of $259, a decrease to non-controlling interest of $53 and a credit to the Deficit of $6. The additional debt
consolidated in the SPEs relates to third party debt in the SPE leasing entities with a weighted average effective
interest rate of approximately 8%.
– Non-controlling interest of $201 at January 1, 2010 as determined under Canadian GAAP has been reclassified to
Equity.