trend-defying growth expansion 2012 - Edmonton Airports ...

Edmonton Regional Airports Authority
NOTEs TO FINANcIAL sTATEmENTs
December 31, 2008 and 2007
(in thousands of dollars, unless otherwise noted)
i) Recent accounting pronouncements issued
but not adopted
i) Intangible assets
In February 2008 the CICA issued new
accounting recommendations for goodwill
and intangible assets which establish standards
for the recognition, measurement, presentation
and disclosure of goodwill and intangible
assets (including internally developed intangible
assets). These recommendations are effective for
Edmonton Airports beginning January 1, 2009.
Goodwill and intangible assets that are not assets
as defined by GAAP will be derecognized and
charged to the equity of Edmonton Airports at that
date. Edmonton Airports is presently evaluating
the impact of the standard, but does not expect
the adoption of these standards to have a material
impact on its financial position and net earnings.
ii) International financial reporting standards
In February 2008, the Canadian Accounting
Standards Board (AcSB) confirmed that Canadian
publicly accountable enterprises will need to adopt
International Financial Reporting Standards
(IFRS) effective for years beginning on or after
January 1, 2011. Edmonton Airports has started
an IFRS conversion project and is evaluating the
impact of the initial application of these standards
on the financial statements.
3 Lease agreements
a) International Airport
i) Amended Canada Lease
Effective December 31, 1997, Edmonton Airports
and the Landlord agreed to amendments to some
of the financial components of the original sixtyyear
lease agreement dated July 31, 1992 for the
International Airport. The terms provided for
the adjustment of rent due for the years 1992 to
1995, required the accelerated repayment of the
deferred rent payable and revised the calculation
of rent for the ten-year period 1996 to 2005.
On May 9, 2005, the Government of Canada
announced the adoption of a new rent policy
for the years 2006 and beyond that results in a
reduction of rent that would have otherwise
been payable under the previous ground lease
agreement. In December 2005, Edmonton
Airports finalized the amendments to its ground
lease with the Government of Canada (“Amended
Canada Lease”). The new rent agreement has
been phased in over four years beginning in 2006.
ii) Lease term
The Amended Canada Lease provides that
Edmonton Airports will lease the International
Airport for an initial term of sixty years ending
in 2052. A twenty year renewal option may be
exercised by Edmonton Airports. At the end of
the term, unless otherwise extended, Edmonton
Airports is obligated to return control of the
International Airport to the Landlord.
iii) Payment of rent
The Amended Canada Lease requires Edmonton
Airports to pay predetermined escalating Canada
Lease Rent amounts during the four-year transition
period beginning in 2006. Effective January 1, 2010,
Canada Lease Rent will be based on a percentage
of gross revenues on a progressive scale.
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