Air Canada 2012 Annual Report Download - page 62

Download and view the complete annual report

Please find page 62 of the 2012 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

2012 Air Canada Annual Report
62
The total expected impact of the amended standard on Air Canada’s consolidated statement of operations, including the
presentation of interest cost on the additional minimum funding liability, is an increase to Net financing expense relating to
employee benefits of $272 million for the year ended December 31, 2012, and a decrease to Salary, wages and benefits of
$2 million for the year ended December 31, 2012, with an offset to OCI of $273 million. The net result of these combine to
produce an increase of $3 million to total comprehensive income, with a corresponding decrease of $3 million to the other
employee future benefits liability for the year ended December 31, 2012. The amended standard will not impact Air Canada’s
consolidated statement of cash flow.
Amendments to IAS 1 – Financial Statement Presentation
The amendments to IAS 1 require entities to separate items presented in OCI into two groups, based on whether or not they
may be recycled to profit or loss in the future. Items that will not be recycled such as remeasurements related to IAS 19 will
be presented separately from items that may be recycled in the future, such as deferred gains and losses on cash flow hedges.
Entities that choose to present OCI items before tax will be required to show the amount of tax related to the two groups
separately.
Amendments to Other Standards
In addition, there have been amendments to existing standards, including IFRS 7 Financial Instruments: Disclosure, IAS 27,
Separate Financial Statements, IAS 28, Investments in Associates and Joint Ventures, and IAS 32, Financial Instruments:
Presentation. IFRS 7 amendments require disclosure about the effects of offsetting financial assets and financial liabilities and
related arrangements on an entity’s financial position. IAS 27 addresses accounting for subsidiaries, jointly controlled entities
and associates in non-consolidated financial statements. IAS 28 has been amended to include joint ventures in its scope and
to address the changes in IFRS 10 – 13. IAS 32 addresses inconsistencies when applying the offsetting requirements, and is
effective for annual periods beginning on or after January 1, 2014.
Carbon Emissions Accounting Policy
The European Union passed legislation for an Emissions Trading System (“ETS”) which includes carbon emissions from
aviation which was to commence January 2012, including for flights operated between Canada and countries within the
European Union. The legislation required aircraft operators to monitor and report on fuel use and emissions data.
In November 2012, the European Commission announced that it would defer the implementation of the ETS for international
aviation pending the work that ICAO is doing on the multilateral global alternative program and the ICAO assembly in the fall
of 2013. The portion of flights that constituted intra-European Union flying in 2012 were still subject to carbon emission
reporting and surrender of allowance to cover the emissions. This amount represented an insignificant cost to Air Canada.