BRITISH COLUMBIA HYDRO AND POWER AUTHORITY
financial-information-act-return-march-31-2016
financial-information-act-return-march-31-2016
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br />
FOR THE YEARS ENDED MARCH 31, 2016 <strong>AND</strong> 2015<br />
British Columbia Hydro and Power Authority<br />
included in the carrying amount. All regular-way purchases or sales of financial assets are<br />
accounted for on a settlement date basis.<br />
Financial assets and financial liabilities classified as fair value through profit or loss are<br />
subsequently measured at fair value with changes in those fair values recognized in net income in<br />
the period of change. Financial assets classified as available-for-sale are subsequently measured at<br />
fair value, with changes in those fair values recognized in other comprehensive income until<br />
realized. Financial assets classified as held-to-maturity, loans and receivables, and financial<br />
liabilities classified as other financial liabilities are subsequently measured at amortized cost using<br />
the effective interest method of amortization less any impairment. Derivatives, including embedded<br />
derivatives that are not closely related to the host contract and are separately accounted for are<br />
generally classified as fair value through profit or loss and recorded at fair value in the statement of<br />
financial position.<br />
The following table presents the classification of financial instruments in the various categories:<br />
Category<br />
Financial assets and liabilities at fair value<br />
through profit or loss<br />
Held to maturity<br />
Loans and receivables<br />
Other financial liabilities<br />
Financial Instruments<br />
Short-term investments<br />
Derivatives not in a hedging relationship<br />
US dollar sinking funds<br />
Cash<br />
Restricted cash<br />
Accounts receivable and other receivables<br />
Accounts payable and accrued liabilities<br />
Revolving borrowings<br />
Long-term debt (including current portion due in<br />
one year)<br />
Finance lease obligations, First Nations liabilities<br />
and other liabilities presented in other long-term<br />
liabilities<br />
(ii) Fair Value<br />
The fair value of financial instruments reflects changes in the level of commodity market prices,<br />
interest rates, foreign exchange rates and credit risk. Fair value is the amount of consideration that<br />
would be agreed upon in an arm’s length transaction between knowledgeable willing parties who<br />
are under no compulsion to act.<br />
Fair value amounts reflect management’s best estimates considering various factors including<br />
closing exchange or over-the-counter quotations, estimates of future prices and foreign exchange<br />
rates, time value of money, counterparty and own credit risk, and volatility. The assumptions used<br />
in establishing fair value amounts could differ from actual prices and the impact of such variations<br />
could be material. In certain circumstances, valuation inputs are used that are not based on