Cogeco 2012 Annual Report Download - page 89

88 COGECO CABLE INC. 2012 Consolidated financial statements
3. Property, plant and equipment
IAS 16 Property, Plant and Equipment requires that each significant component of an asset be depreciated separately over their
respective useful lives which resulted in a more detailed approach to determining the useful lives for certain asset components under
IFRS than those that were used under previous Canadian GAAP. The impact of the retroactive application of IAS 16 is as follows:
Consolidated statements of financial position
Increase (decrease) August 31, 2011 September 1, 2010
(In thousands of Canadian dollars) $$
Property, plant and equipment (900) (5,705)
Deferred tax liabilities (229) (1,470)
Retained earnings (671) (4,235)
Consolidated statements of profit or loss
Increase (decrease) August 31, 2011
(In thousands of Canadian dollars) $
Depreciation and amortization (4,805)
Deferred tax expense 1,241
Profit or loss for the period 3,564
4. Intangible assets
Under IFRS, intangible assets with indefinite useful lives are not amortized but tested at least annually for impairment. IAS 38, Intangible
assets, requires retrospective application of those requirements. Under Canadian GAAP, those assets were amortized until September 1,
2001 and transitional provisions did not require the reversal of amortization previously recorded. Therefore, on the date of transition, the
Corporation reversed all amortization recorded in respect of intangible assets with indefinite lives. The impact of the change is as follows:
Consolidated statements of financial position
Increase (decrease) August 31, 2011 September 1, 2010
(In thousands of Canadian dollars) $$
Intangible assets 50,781 50,781
Deferred tax liabilities 7,552 7,552
Retained earnings 43,229 43,229
5. Employee benefits
IAS 19 Employee Benefits permits an accounting policy choice with respect to the recognition of actuarial gains and losses. The
Corporation has elected to recognize all actuarial gains and losses immediately in other comprehensive income while under Canadian
GAAP they were accounted for using the corridor method. At the date of transition, all previously unrecognized actuarial gains and
losses, including the unamortized transitional obligation, were recognized in retained earnings. Also, the unrecognized actuarial gains and
losses exceeding the corridor that were recognized for the year ended August 31, 2011 under Canadian GAAP were reversed.
In addition, under IFRS, all unrecognized past service costs that were vested were recognized in retained earnings at the date of
transition whereas under Canadian GAAP past service costs were deferred and amortized on a straight-line basis over the remaining
service period of active employees at the date of employee benefit plan amendments. At the date of transition, all previously
unrecognized past service costs were fully vested and therefore were recognized in retained earnings.
The impact from those changes is summarised as follows:
Consolidated statements of financial position
Increase (decrease) August 31, 2011 September 1, 2010
(In thousands of Canadian dollars) $$
Deferred tax assets 1,810 1,160
Pension plan liabilities and accrued employee benefits 6,852 4,437
Retained earnings (5,042) (3,277)