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Consolidated financial statements COGECO CABLE INC. 2015 73
P) SEGMENT REPORTING
An operating segment is a component of the Corporation that engages in business activities from which it may earn revenue and incur
expenses, including revenue and expenses that relate to transaction with any of the Corporation's other components. All segments'
operating results are reviewed regularly by the Corporation's Chief Operating Decision Maker (“CODM”) to decide about resources to
be allocated to the operating segment and to assess its performance, and for which discrete financial information is available. Segment
operating results that are directly reported to the CODM include items directly attributable to an operating segment as well as those
that can be allocated on a reasonable basis.
Q) ACCOUNTING JUDGMENTS AND USE OF ESTIMATES
The preparation of consolidated financial statements in accordance with IFRS requires management to make judgments, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, revenue and
expenses.
Significant areas requiring the use of management's judgments and estimates relate to the following items:
Allowance for doubtful accounts
Allowance for doubtful accounts is established based on specific credit risk of the Corporation's customers by examining such
factors as the number of overdue days of the customer's balance outstanding as well as the customer's collection history. As a
result, conditions causing fluctuations in the aging of customer accounts will directly impact the reported amount of bad debt
expenses (see Note 21 A));
Business combinations
Fair value of assets acquired and liabilities assumed in a business combination is estimated based on information available at the
date of acquisition and involves considerable judgment in determining the fair values assigned to the property, plant and equipment
and intangible assets acquired and liabilities assumed on acquisition. Among other things, the determination of these fair values
involves the use of discounted cash flow analyses, estimated future margins and estimated future customer counts (see Note 6);
Depreciation of property, plant and equipment and amortization of intangible assets
Measurement of property, plant and equipment and intangible assets with finite useful lives requires estimates for determining the
asset expected useful lives and residual values. Management's judgment is also required to determine the components and the
depreciation method used (see Note 8);
Provisions
Management's judgment is used to determine the timing, likelihood and the amount of expected cash outflows as well as the
discount rate (see Note 15);
Fair value measurement of derivative financial instruments
The fair value of derivative financial instruments is estimated using valuation techniques based on several market data such as
interest rates, foreign exchange rates and the Corporation's or counterparties' credit risks;
Measurement of defined benefit obligation
The net defined benefit obligation is determined using actuarial calculations that are based on several assumptions. The actuarial
valuation uses the Corporation's assumptions for the discount rate, the expected rate of compensation increase and the mortality
table. If the actuarial assumptions are found to be significantly different from the actual data subsequently observed, it could impact
the reported amount of defined benefit pension cost recognized in profit or loss, the remeasurement of the net defined benefit
asset or liability recognized directly in other comprehensive income and the net assets or net liabilities related to these obligations
presented in the consolidated statement of financial position (see Note 20);
Measurement of non-financial assets
The measurement of non-financial assets requires the use of management judgment to identify the existence of impairment
indicators and the determination of CGUs. Furthermore, when determining the recoverable amount of a CGU or an asset, the
Corporation uses significant estimates such as the estimation of future cash flows and discount rates applicable. Any significant
modification of market conditions could translate into an inability to recover the carrying amounts of non-financial assets (Note
14); and