Air Canada 2013 Annual Report Download - page 94

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2013 Air Canada Annual Report
94
Certain of the Corporation's pension plans are subject to minimum funding requirements. The liability in respect of minimum
funding requirements is determined using the projected minimum funding requirements, based on management's best
estimates of the actuarially determined funded status of the plan, market discount rates and salary escalation estimates. The
liability in respect of the minimum funding requirement and any subsequent remeasurement of that liability are recognized
immediately in other comprehensive income and deficit without subsequent reclassification to income.
Impact upon adoption of Amendments to IAS 19 – Employee Benefits
The Corporation adopted the revised IAS 19 standard effective January 1, 2013, in accordance with the applicable transitional
provisions. The amendments to IAS 19 make significant changes to the recognition and measurement of defined benefit
pension expense and termination benefits, and expanded the disclosures for employee benefits. Actuarial gains and losses are
renamed ‘remeasurements’ and are recognized immediately in Other comprehensive income (“OCI”). Remeasurements
recognized in OCI are not recycled through profit or loss in subsequent periods. The amendments also accelerate the
recognition of past service costs whereby they are recognized in the period of a plan amendment, irrespective of whether the
benefits have vested. The annual expense for a funded benefit plan is computed based on the application of the discount rate
to the net defined benefit asset or liability, including interest on any liability in respect of minimum funding requirements. The
Corporation continues to immediately recognize in the deficit all pension and benefit adjustments recognized in OCI. The
Corporation also continues to recognize interest expense on net post-employment benefit liabilities in Net financing expense
related to employee benefits in the consolidated statement of operations.
The Corporation adopted these amendments retrospectively and adjusted its equity as at January 1, 2012 to recognize
previously unrecognized past service costs. The financing expense and employee benefit expense for the comparable period
have been adjusted to reflect the accounting changes for defined benefit plans. The adjustments for each financial statement
line item affected are presented in the tables below.
Adjustments to consolidated statement of financial position
December 31, 2013 December 31, 2012 January 1, 2012
Decrease in Pension and other benefit liabilities $(3) $(3) $ –
Increase in Equity $3 $3 $ –
Adjustments to consolidated statement of operations
Year ended December 31
2013 2012
Increase in:
Wages, salaries, and benefits $– $ 1
Benefit plan amendments – (3)
Net financing expense relating to employee benefits 312 272
Decrease in net income $312 $ 270
Decrease in net income after accounting change attributable to:
Shareholders of Air Canada 312 270
Non-controlling interests – –
$ 312 $ 270
These adjustments reduced basic and diluted earnings per share by $1.12 for the year ended December 31, 2013 (2012 –
$0.97 for the year ended December 31, 2012).