## Adoption of Accounting Standards 

i. Consolidated Financial Statements, Joint Ventures and Disclosures 

In May 2011, the IASB issued three standards: IFRS 10, Consolidated Financial Statements  (“IFRS 10”), IFRS 11, Joint Arrangements  (“IFRS 11”), and IFRS 12, Disclosure of Interests in Other Entities  (“IFRS 12”), and amended two standards: IAS 27, Separate Financial Statements  (“IAS 27”), and IAS 28, Investments in Associates and Joint Ventures  (“IAS 28”). Each of the new and amended standards became effective on January 1, 2013. 

IFRS 10 replaces IAS 27 and SIC-12, Consolidation-Special Purpose Entities  (“SIC-12”). The consolidation requirements previously included in IAS 27 have been included in IFRS 10. IFRS 10 uses control as the single basis for consolidation, irrespective of the nature of the investee, eliminating the risks and rewards approach included in SIC-12. An investor must exercise power over the investee’s financial and operating decisions, have exposure or rights to variable returns from involvement with the investee, and the ability to use its power over the investee to affect the amount of its returns in order to conclude it controls an investee. IFRS 10 requires continuous reassessment of changes in an investor’s power over the investee and changes in the investor’s exposure or rights to variable returns. The retrospective application of IFRS 10 increased consolidated assets, liabilities and non-controlling interests by $218 million, $114 million and $104 million, respectively, as at December 31, 2012, and increased consolidated revenues and net income by $69 million and $8 million, respectively, for the year then ended, with no impact on common equity or net income to shareholders during the periods. 

IFRS 11 supersedes IAS 31, Interests in Joint Ventures  and SIC-13, Jointly Controlled Entities – Non-Monetary Contributions by Venturers . IFRS 11 is applicable to all parties that have an interest in a joint arrangement. IFRS 11 establishes two types of joint arrangements: joint operations and joint ventures. In a joint operation, the parties to the joint arrangement have rights to the assets and obligations for the liabilities of the arrangement, and recognize their share of the assets, liabilities, revenues and expenses. In a joint venture, the parties to the arrangement have rights to the net assets of the arrangement and account for their interest using the equity method of accounting under IAS 28. IAS 28 prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. 

IFRS 12 integrates the disclosure requirements of interests in other entities and requires a parent company to disclose information about significant judgments and assumptions it has made in determining whether it has control, joint control, or significant influence over another entity, and the type of joint arrangement when the arrangement has been structured through a separate vehicle. An entity should also provide these disclosures when changes in facts and circumstances affect the entity’s conclusion during the reporting period. The disclosure requirements of IFRS 12 are applicable for interim consolidated financial statements when significant events or transactions occur during the interim period requiring such disclosure. Otherwise, the additional disclosures will be included in the company’s annual consolidated financial statements. 

ii. Employee Benefits 

In September 2011, the IASB amended IAS 19, Employee Benefits (“IAS 19”) for items impacting defined benefit plans including the recognition of: actuarial gains and losses within other comprehensive income; interest on the net benefit liability (or asset) in profit and loss; and unvested past service costs in profit and loss at either the earlier of when an amendment is made or when related restructuring or termination costs are recognized. Additionally, the adoption of the amendments to IAS 19 required the company to retroactively exclude expected returns on plan assets from profit and loss, the result of which was a net charge against common equity of $6 and $10 million as at January 1, 2012 and December 31, 2012, respectively. 

iii. Fair Value Measurement 

IFRS 13, Fair Value Measurements  (“IFRS 13”) establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The application of IFRS 13 has not materially impacted the manner in which the company measures its financial and non-financial assets and liabilities. The adoption of IFRS 13 has resulted in more comprehensive disclosures related to fair values used within the consolidated financial statements. 

iv. Presentation of Other Comprehensive Income 

In September 2011, the IASB made amendments to IAS 1, Presentation of Financial Statements  (“IAS 1”). The amendments require that items of other comprehensive income are grouped into two categories: items that may be reclassified subsequently to profit or loss and items that will not be reclassified subsequently to profit and loss. Income tax on items of other comprehensive income are required to be allocated on the same basis. The consolidated statements of comprehensive income were amended in this interim report to reflect the changes in presentation. 

v. Financial Instruments: Disclosures 

The amendments to IFRS 7 contain new disclosure requirements for financial assets and liabilities that are offset in the statement of financial position or subject to master netting arrangements or similar arrangements. The amendments to IFRS 7 have been applied prospectively, however the application of these amendments had no material impacts on the companies consolidated financial statements. 

