Offer to purchase CLEARNET.pdf - About TELUS

TELUS CORPORATION
(FORMERLY BCT.TELUS COMMUNICATIONS INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999
21. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (Continued)
are recognized as liabilities assumed in a purchase business combination. Therefore, qualifying merger
related restructuring costs (after tax) of $144.6 million associated with TELUS have been recorded as
liabilities assumed at the time of purchase.
(c) Depreciation
As TELUS capital assets on acquisition have been recorded at their fair value, depreciation of such assets
will be different under U.S. GAAP.
(d) Interest
As TELUS long-term debt on acquisition has been recorded at its fair value, the interest expense of the
Company will be different under U.S. GAAP.
(e) Intangible Assets
As TELUS intangible assets on acquisition have been recorded at their fair value, amortization of such
assets needs to be included under U.S. GAAP. Amortization is calculated using the straight-line method at
the following rates:
Assigned Fair Value
on Acquisition Useful Life
Subscribers — wireline ...................... $1,950.0 million 40 years
Spectrum licenses .......................... $1,833.3 million 40 years
Subscribers — wireless ...................... $ 250.0 million 10 years
(f) Goodwill
Under the purchase method of accounting, TELUS assets and liabilities at acquisition have been recorded
at their fair values with the excess purchase price being allocated to goodwill. The goodwill on the
acquisition of TELUS is being amortized on a straight line basis over its estimated life of 20 years.
(g) Change in Accounting Policy
Under Canadian GAAP, changes in accounting policies are applied retroactively. Under U.S. GAAP the
cumulative effect of changing to a new accounting principle on the amount of retained earnings at the
beginning of the period in which the change is made is included in net income of the period of the change.
(h) Asset Impairment
In assessing capital asset impairment under Canadian GAAP, estimated future net cash flows are not
discounted in computing the net recoverable amount. Under U.S. GAAP, the determination on whether or
not the assets are impaired is made on a discounted basis. Upon determining that asset impairment existed,
the Company estimated fair value using discounted cash flows. Under U.S GAAP the charge taken would
be $232.2 million higher and would not be considered an extra-ordinary item.
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