Cogeco 2011 Annual Report Download - page 15

14 COGECO CABLE INC. 2011 Management’s Discussion and Analysis (MD&A)
management fee of $9 million to COGECO, also representing approximately 0.7% of the Corporation’s fiscal 2010 revenue. The Audit
Committee of the Corporation can increase the cap under certain circumstances upon request to that effect by COGECO. In addition, the
Corporation reimburses COGECO’s out-of-pocket expenses incurred with respect to services provided to the Corporation under the
Management Agreement. For fiscal 2012, the management fee has been increased to $9.5 million as of September 1, 2011, pursuant to the
Management Agreement, which reflects an increase of 3.1% based on the increase in the Consumer Price Index in Canada during the
preceding 12 month period.
Adoption of new accounting standards
Future accounting pronouncements
Harmonization of Canadian and International accounting standards
In March 2006, the Canadian Accounting Standards Board (“AcSB”) of the Canadian Institute of Chartered Accountants (“CICA”) released its
new strategic plan, which proposed to abandon Canadian GAAP and effect a complete convergence to the International Financial Reporting
Standards (“IFRS”) for Canadian publicly accountable entities. This plan was confirmed in subsequent exposure drafts issued in April 2008,
March 2009 and October 2009. The changeover will occur no later than fiscal years beginning on or after January 1, 2011. Accordingly, the
Corporation’s first interim consolidated financial statements presented in accordance with IFRS will be for the quarter ending
November 30, 2011, and its first annual consolidated financial statements presented in accordance with IFRS will be for the year ending
August 31, 2012.
IFRS uses a conceptual framework similar to Canadian GAAP, but there are significant differences in recognition, measurement and disclosure
requirements. The Corporation has established a project team including representatives from various areas of the organization to plan and
complete the transition to IFRS. This team reports periodically to the Audit Committee, which oversees the IFRS implementation project on
behalf of the Board of Directors. The Corporation is assisted by external advisors as required.
The implementation project consists of three primary phases, which may occur concurrently as IFRS are applied to specific areas of
operations:
Phase Area of impact Key activities Status
Scoping and
diagnostic
Pervasive Perform a high-level impact assessment to identify key areas that are expected to be impacted
by the transition to IFRS.
Completed
Rank IFRS impacts in order of priority to assess the timing and complexity of transition efforts
that will be required in subsequent phases.
Impact analysis,
evaluation and
design
For each area
identified in the
scoping and
diagnostic phase
Identify the specific changes required to existing accounting policies. Completed
Analyse policy choices permitted under IFRS.
Present analysis and recommendations on accounting policy choices to the Audit Committee.
Pervasive Identify impacts on information systems and business processes. Completed
Prepare draft IFRS consolidated financial statement template.
Identify impacts on internal controls over financial reporting and other business processes.
Implementation
and review
For each area
identified in the
scoping and
diagnostic phase
Test and execute changes to information systems and business processes. Completed
Obtain formal approval of required accounting policy changes and selected accounting policy
choices.
Communicate impact on accounting policies and business processes to external stakeholders.
Pervasive Gather financial information necessary for opening balance sheet and comparative IFRS
financial statements.
Completed
Update and test internal control processes over financial reporting and other business
processes.
Collect financial information necessary to compile IFRS-compliant financial statements. In progress - to be
completed during fiscal
2012
Provide training to employees and end-users across the organization.
Prepare IFRS compliant financial statements.
Obtain the approval from the Audit Committee of the IFRS consolidated financial statements.
Continually review IFRS and implement changes to the standards as they apply to the
Corporation.
To be completed
throughout transition
and post-conversion
periods