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14 COGECO CABLE INC. 2010 Management’s Discussion and Analysis (MD&A)
Adoption of new accounting standards
Adopted during fiscal 2010
Goodwill and intangible assets
In February 2008, the Canadian Institute of Chartered Accountants (“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 established
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 remained unchanged from the standards included in the previous Section
3062. The new section was applicable to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2008,
with retroactive application. The adoption of Section 3064 resulted in the elimination of the deferral of new service launch costs which are now
recognized as operating costs when they are incurred. Reconnect and additional service activation costs are capitalized up to an amount not
exceeding the revenue generated by the reconnect activity. Consequently, the Corporation adjusted opening retained earnings on a retroactive
basis and the prior period comparative figures have been restated. The adoption of this new section had the following impacts on the
Corporation’s consolidated financial statements:
Consolidated statement of income (loss)
Increase (decrease) Year ended
August 31, 2009
(in thousands of dollars) $
Operating costs 16,519
A
mortization of deferred charges (14,353)
Future income tax expense (613)
Net income (1,553)
Consolidated balance sheets
Increase (decrease) August 31,
2009
September 1,
2008
(in thousands of dollars) $$
Deferred charges (34,491) (32,325)
Future income tax liabilities (10,212) (9,599)
Retained earnings (24,279) (22,726)
Financial instrument disclosures
In 2009, the Canadian Accounting Standards Board (“AcSB”) amended CICA Handbook Section 3862, Financial instruments – disclosures, to
require enhanced disclosures about the relative reliability of the data, or inputs, that an entity uses in measuring the fair values of its financial
instruments. The new requirements are effective for annual financial statements for fiscal years ending after September 30, 2009. The adoption
of this amendment did not have any impact on the classification and measurement of the Corporation’s financial instruments. The new
disclosures pursuant to this amendment are included in note 18 of the Corporation’s consolidated financial statements.
Adopted during fiscal 2009
Capital disclosures and financial instruments
Effective September 1, 2008, the Corporation adopted the CICA Handbook Section 1535, Capital disclosures, Section 3862, Financial
instruments – disclosures and Section 3863, Financial instruments – presentation.
Capital disclosures
Section 1535 of the CICA Handbook requires that an entity disclose information that enables users of its financial statements to evaluate the
entity’s objectives, policies and processes for managing capital, including disclosures of any externally imposed capital requirements and the
consequences for non-compliance. These new disclosures are included in note 18 of the Corporation’s consolidated financial statements.
Financial instruments
Section 3862 on financial instrument disclosures requires the disclosure of information about the significance of financial instruments for the
entity's financial position 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.