Q4 - Power Corporation of Canada

POWER CORPORATION OF CANADAIFRS 9 – Financial Instruments Effective for the Corporation on January 1, 2015, IFRS 9, Financial Instrumentsrequires all financial assets to be classified on initial recognition at amortized cost or fair value while eliminatingthe existing categories of available for sale, held to maturity, and loans and receivables.The new standard also requires: embedded derivatives to be assessed for classification together with their financial asset host; an expected loss impairment method be used for financial assets; and amendments to the criteria for hedge accounting and measuring effectiveness.The full impact of IFRS 9 on the Corporation will be evaluated after the remaining stages of the IASB’s project toreplace IAS 39, Financial Instruments: Recognition and Measurement – impairment methodology, hedgeaccounting, and asset and liability offsetting – are finalized. The current timetable for adoption of IFRS 9,Financial Instruments is for the annual period beginning January 1, 2015; however, the Corporation continues tomonitor this standard in conjunction with developments to IFRS 4.IAS 32 – Financial Instruments: Presentation Effective for the Corporation on January 1, 2014, IAS 32,Financial Instruments: Presentation clarifies the existing requirements for offsetting financial assets and financialliabilities.The Corporation is evaluating the impact this standard will have on the presentation of its financial statements.Exposure drafts not yet effectiveIAS 17 – Leases The IASB issued an exposure draft proposing a new accounting model for leases where bothlessees and lessors would record the assets and liabilities on the balance sheet at the present value of the leasepayments arising from all lease contracts. The new classification would be the right‐of‐use model, replacing theoperating and finance lease accounting models that currently exist.The full impact of adoption of the proposed changes will be determined once the final leases standard is issued.IAS 18 – Revenue The IASB issued a second exposure draft in November 2011 which proposed a single revenuerecognition standard to align the financial reporting of revenue from contracts with customers and related costs.A company would recognize revenue when it transfers goods or services to a customer in the amount of theconsideration the company expects to receive from the customer.The full impact of adoption of the proposed changes will be determined once the final revenue recognitionstandard is issued, which is targeted for release in 2013.A 24POWER CORPORATION OF CANADA