Cogeco 2008 Annual Report Download - page 48

Notes to the Consolidated Financial Statements COGECO CABLE INC. 2008 47
financial instruments for the entity's financial position and performance and the nature and extent of risks arising from financial
instruments to which the entity is exposed during the period and at the balance sheet date, and how the entity manages those risks.
Section 3863 on the presentation of financial instruments is unchanged from the presentation requirements included in Section
3861. Section 1535 on capital disclosures requires the disclosure of information about an entity's objectives, policies and processes
for managing capital. The Corporation is currently evaluating the impact of these new Sections on its consolidated financial
statements.
iv. GOODWILL AND INTANGIBLE ASSETS
In February 2008, the CICA issued Section 3064, Goodwill and intangible assets, replacing Section 3062, Goodwill and other
intangible assets and Section 3450, Research and development costs. The new Section establishes standards for the recognition,
measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets by profit-oriented
enterprises. Standards concerning goodwill are unchanged from the standards included in the previous Section 3062. The new
Section will be applicable to interim and annual financial statements relating to fiscal years beginning on or after
October 1, 2008. The Corporation is currently evaluating the impact of the adoption of this new Section on its consolidated financial
statements.
v. HARMONIZATION OF CANADIAN AND INTERNATIONAL STANDARDS
In March 2006, the Accounting Standards Board of the CICA released its new strategic plan, which proposed to abandon Canadian
GAAP and effect a complete convergence to the International Financial Reporting Standards (“IFRS”).
In April 2008, the CICA published an exposure draft as guidance which requires the transition to IFRS to replace Canadian GAAP
as currently employed by Canadian publicly accountable enterprises. The changeover will occur no later than fiscal years beginning
on or after January 1, 2011. Accordingly, the Corporation expects that its first interim consolidated financial statements presented in
accordance with IFRS will be for the three-month period ended November 30, 2011, and its first annual consolidated financial
statements presented in accordance with IFRS will be for the year ended August 31, 2012.
IFRS uses a conceptual framework similar to Canadian GAAP, but there are significant differences in recognition, measurement and
disclosure requirements. As a result, the Corporation is developing a plan to convert its consolidated financial statements to IFRS.
The plan highlights the need to identify key accounting policy changes as the first step in the conversion process. Once these
changes have been identified, other elements of the plan will be addressed. The Corporation has selected an external advisor to
assist with the project and is currently in the process of assessing the differences between IFRS and the Corporation’s current
accounting policies.
As implications of the conversion are identified, information technology and data system impacts will be assessed. Similarly, impacts
on business activities will be assessed as differences are identified between the Corporation’s current accounting policies and IFRS.
Changes in accounting policies are likely. These changes may materially impact the Corporation’s consolidated financial
statements.
C) REVENUE RECOGNITION
The Corporation considers revenue to be earned as services are rendered, provided that ultimate collection is reasonably assured.
The Corporation earns revenue from several sources. The recognition of revenue from the principal sources is as follows:
• Revenue from Cable Television, HSI and Telephony services is recognized when services are provided;
• Revenue generated from sales of home terminal devices is recorded as equipment revenue upon activation of services;
• Installation revenue is deferred and amortized over the average life of a customer’s subscription;
• Promotional offers are accounted for as deductions from revenue when customers take advantage of such offers.
Amounts received or invoiced that do not comply with these criteria are accounted for as deferred and prepaid income.