Cogeco 2012 Annual Report Download - page 90

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Consolidated financial statements COGECO CABLE INC. 2012 89
Consolidated statements of profit or loss
Increase (decrease) August 31, 2011
(In thousands of Canadian dollars) $
Operating expenses (278)
Deferred tax expense 75
Profit or loss for the period 203
6. Borrowing costs
IFRS requires that borrowing costs be capitalized on qualifying assets whereas Canadian GAAP permitted an accounting policy choice to
capitalize or expense these costs, which the Corporation elected to expense.
As described above, the Corporation has elected to apply those requirements only to borrowing costs relating to assets for which the
commencement date for capitalization is on or after the date of transition. Therefore, there is no impact at the date of transition since
those costs were already expensed. The impact of that change in respect of assets which commencement date for capitalization is after
the date of transition is as follows:
Consolidated statements of financial position
Increase (decrease) August 31, 2011 September 1, 2010
(In thousands of Canadian dollars) $$
Property, plant and equipment 541
Deferred tax liabilities 138
Retained earnings 403
Consolidated statements of profit or loss
Increase (decrease) August 31, 2011
(In thousands of Canadian dollars) $
Financial expense (541)
Deferred tax expense 138
Profit or loss for the period 403
7. Income taxes
The expected manner of recovery of intangible assets with indefinite useful lives for purposes of calculating deferred taxes is different
under IFRS than under Canadian GAAP. The impact of applying IAS 12 on a retroactive basis is as follows:
Consolidated statements of financial position
Increase (decrease) August 31, 2011 September 1, 2010
(In thousands of Canadian dollars) $$
Deferred tax liabilities 52,463 52,463
Retained earnings (52,463) (52,463)
In addition, IFRS also requires that temporary differences relating to current assets and current liabilities be presented as non-current
liabilities and non-current assets.
8. Effects of changes in foreign exchange rates
Under Canadian GAAP, a reduction in net investment occurs if dividends have been paid out of pre-acquisition profits, and the cumulative
exchange differences are proportionally reduced and transferred to profit or loss. Under IFRS, a disposal occurs when an entity’s entire
interest in a foreign operation is disposed of or, in the case of a partial disposal, the partial disposal results in the loss of control of a
subsidiary loss of significant influence or loss of joint control. The impact of applying IAS 21 on a retroactive basis is as follows:
Consolidated statements of financial position
Increase (decrease) August 31, 2011 September 1, 2010
(In thousands of Canadian dollars) $$
A
ccumulated other comprehensive income 1,778 1,778
Retained earnings (1,778) (1,778)