Page 65 - Suncor AR English

9. ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES

Changes in Accounting Policies
Suncor’s significant accounting policies are described in Employee Benefits

notes 3 to the audited Consolidated Financial Statements The revised standard resulted in changes to the calculation
for the year ended December 31, 2013.
and presentation of pension interest cost, which is now

Effective January 1, 2013, the company adopted IFRS 10 calculated on the net unfunded obligation, applying the
discount rate used to measure the employee benefit
Consolidated Financial Statements, IFRS 11 Joint
Arrangements, IFRS 12 Disclosures of Interests in Other obligation at the beginning of the annual period.
Previously, pension interest cost was net of interest income
Entities and IFRS 13 Fair Value Measurement, and
amendments to International Accounting Standard (IAS) 19 on plan assets (using the expected return on plan assets)
and interest expense on the plan obligation (using the
Employee Benefits, IFRS 7 Financial Instruments: Disclosure
and IAS 36 Impairment of Assets.
discount rate). The net pension interest expense was
reclassified to Financing Expenses from Operating, Selling

Scope of a Reporting Entity
and General expense. The change to the pension interest
cost calculation also resulted in the refundable tax accounts
IFRS 10 creates a single consolidation model by revising the
definition of control in order to apply the same control (RTA) being present valued, resulting in an immaterial
adjustment to the Consolidated Balance Sheets.
criteria to all types of entities, including joint arrangements,
associates and structured entities. IFRS 11 establishes a
Fair Value Measurements
principle-based approach to the accounting for joint
arrangements by focusing on the rights and obligations of IFRS 13 establishes a single source of guidance for most
fair value measurements, clarifies the definition of fair
the arrangement and limits the application of proportionate
consolidation accounting to arrangements that meet the value, and enhances the disclosures on fair value
measurements. The adoption of IFRS 13 did not require any
definition of a joint operation, where sufficient rights and
obligations are passed to the partners. Arrangements that adjustments to the valuation techniques used by the
company to measure fair value and did not result in any
meet the definition of a joint venture are required to apply
the equity method of accounting. IFRS 12 is a fair value measurement adjustments as at January 1, 2013.
The adoption of this standard resulted in additional
comprehensive disclosure standard for all forms of interests
in other entities, including subsidiaries, joint arrangements, disclosures regarding the fair value measurement of the
company’s financial instruments. See note 27 to the
associates and unconsolidated structured entities.
audited Consolidated Financial Statements for the year

The company identified two existing joint arrangements in ended December 31, 2013.
the Refining and Marketing segment that have been
retrospectively reclassified as joint ventures as a result of
Offsetting Financial Assets and Liabilities
IFRS 11, and are now being accounted for using the equity The amendments to IFRS 7 clarify the offsetting model and
method of accounting rather than the proportionate
develop common disclosure requirements to enhance the
consolidation method. This change does not have a understanding of the potential effects of offsetting
material impact to the Consolidated Financial Statements,
arrangements. The adoption of this amendment resulted in
but does result in the netting of revenues and expenses for additional disclosure for the company’s offsetting financial
these entities into Other Income. Cash flow from
assets and financial liabilities. See note 27 to the audited
operations from these joint arrangements is now Consolidated Financial Statements for the year ended
recognized based on cash distributions received in the
December 31, 2013.
period, where previously it was recognized based on the
company’s proportionate share of cash flow from
Recoverable Amount Disclosures for Non-Financial
operations. In addition, the company’s net investment in Assets
these entities is now presented in Other Assets. The
The company early adopted amendments to IAS 36
company determined that the adoption of IFRS 10 did not Impairment of Assets. The amendments clarified the
result in changes to the consolidation conclusions of any of
recoverable amount is disclosed only when an asset or cash
its subsidiaries and investees. See note 29 for additional generating unit is impaired. The adoption of this amended
disclosures regarding the company’s interest in associates
standard also resulted in expanded disclosure for
and joint arrangements as a result of adopting IFRS 12.
recoverable amounts of impaired assets that are calculated

based on fair value less costs of disposal methodology and
for cash-generating units with goodwill that are not

impaired, including the disclosure of the fair value

SUNCOR ENERGY INC. ANNUAL REPORT 2013 61