Page 70 - Suncor AR English

ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES

Control and Significant Influence
the liabilities of the arrangements. A joint arrangement

Control is defined as the power to govern the financial and whereby the parties take their share of substantially all of
operating decisions of an entity so as to obtain benefits the output of the joint arrangement would be an indicator

from its activities, and significant influence is defined as the for classification as a joint operation, regardless of structure
power to participate in the financial and operating of the arrangement, and accounted for by recognizing the

decisions of the investee. The assessment of whether the company’s share of assets and liabilities jointly owned and
company has control, joint control, or significant influence incurred, and the recognition of its share of revenue and

over another entity requires judgment of the impact it has expenses of the joint operation.
over the financial and operating decisions of the entity and

the extent of the benefits it obtains.
Fair Value of Financial Instruments
The fair value of financial instruments is determined

Joint Arrangements
whenever possible based on observable market data. If not
The classification of joint arrangements structured through available, the company uses third-party models and

separate vehicles as either joint ventures or joint operations valuation methodologies that utilize observable market
requires significant judgment and depends on the legal data, including forward commodity prices, foreign

form and contractual terms of the arrangement as well as exchange rates and interest rates to estimate the fair value
other facts and circumstances. These include whether there of financial instruments, including derivatives. In addition to

is exclusive dependence on the parties to the joint market information, the company incorporates transaction-
arrangement for cash flows through the sale of product specific details that market participants would utilize in a
and funding of operations, and to assess the rights of the fair value measurement, including the impact of

economic benefits of the assets and obligation for funding
non-performance risk.

66 SUNCOR ENERGY INC. ANNUAL REPORT 2013