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A joint arrangement whereby the parties take their share of substantially all of the output of the joint arrangement would

be an indicator for classification as a joint operation, regardless of structure of the arrangement, and accounted for by
recognizing the company’s share of assets and liabilities jointly owned and incurred, and the recognition of its share of

revenue and expenses of the joint operation.

Fair Value of Financial Instruments
The fair value of financial instruments is determined whenever possible based on observable market data. If not available,

the company uses third-party models and valuation methodologies that utilize observable market data including forward
commodity prices, foreign exchange rates and interest rates to estimate the fair value of financial instruments, including

derivatives. In addition to market information, the company incorporates transaction specific details that market
participants would utilize in a fair value measurement, including the impact of non-performance risk.

5. RECENTLY ANNOUNCED ACCOUNTING PRONOUNCEMENTS

The standards and interpretations that are issued but not yet effective up to the date of issuance of the company’s
financial statements, and that may have an impact on the disclosures and financial position of the company, are disclosed

below. The company intends to adopt these standards and interpretations, if applicable, when they become effective.

Offsetting Financial Assets and Financial Liabilities
In December 2011, the IASB issued amendments to IAS 32 Financial Instruments: Presentation to clarify the requirements

for offsetting financial assets and liabilities. The amendments clarify that the right to offset must be available on the
current date and cannot be contingent on a future event. Retrospective application of amendments to IAS 32 are effective

for annual periods beginning on or after January 1, 2014, with earlier application permitted. The adoption of this
amended standard is not expected to have a material impact on the company’s financial statements.

Levies

In May 2013, the IASB issued International Financial Reporting Interpretation Committee (IFRIC) 21 Levies. This clarifies
that an entity recognizes a liability for a levy when the activity that triggers payment occurs.

For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liability should be

anticipated before the minimum threshold is reached. Retrospective application of this interpretation is effective for annual
periods beginning on or after January 1, 2014, with earlier application permitted. The company is assessing the impact of

this interpretation on royalties and property taxes.

Financial Instruments: Recognition and Measurement
In November 2009, as part of the IASB project to replace International Accounting Standard (IAS) 39 Financial

Instruments: Recognition and Measurement, the IASB issued the first phase of IFRS 9 Financial Instruments. It contained
requirements for the classification and measurement of financial assets, and was updated in October 2010 to incorporate

financial liabilities. In November 2013, the IASB issued amendments to include the new general hedge accounting model
and to postpone the mandatory effective date of this standard indefinitely. The full impact of this standard will not be

known until the amendments addressing impairments, classification and measurement have been completed. When these
projects are completed, an effective date will be added by the IASB.

6. ADOPTION OF NEW AND AMENDED IFRS STANDARDS

Effective January 1, 2013, the company adopted the following new and amended IFRS standards and interpretations.

New and/or amended IFRS standards that resulted in restatements to comparative figures

Impact of the application of IFRS 11 Joint Arrangements

IFRS 11 establishes a principle-based approach to accounting for joint arrangements by assessing the rights and
obligations of the arrangement and limits the application of proportionate consolidation accounting to arrangements

where sufficient rights and obligations are passed to the partners. As a result, two existing joint arrangements in the
Refining and Marketing segment were reclassified as joint ventures, and are now being accounted for using the equity

SUNCOR ENERGY INC. ANNUAL REPORT 2013 99