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The following table provides the carrying values and fair values of financial instruments as at December 31, 2013 and December 31, 2012: 

(MILLIONS) Financial assets Cash and cash equivalents Other financial assets Government bonds Corporate bonds Fixed income securities Common shares and warrants Loans and notes receivable Accounts receivable and other 

Financial liabilities Corporate borrowings Property-specific mortgages Subsidiary borrowings Accounts payable and other Capital securities Interests of others in consolidated funds 

The current and non-current balances of other financial assets are as follows: 

(MILLIONS) Current Non-current Total 

## Hedging Activities 

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The company uses derivatives and non-derivative financial instruments to manage or maintain exposures to interest, currency, credit and other market risks. For certain derivatives which are used to manage exposures, the company determines whether hedge accounting can be applied. When hedge accounting may be applied, a hedge relationship may be designated as a fair value hedge, cash flow hedge or a hedge of foreign currency exposure of a net investment in a foreign operation. To qualify for hedge accounting, the derivative must be highly effective in accomplishing the objective of offsetting changes in the fair value or cash flows attributable to the hedged risk both at inception and over the life of the hedge. If it is determined that the derivative is not highly effective as a hedge, hedge accounting is discontinued prospectively. 

i. Cash Flow Hedges 

The company uses the following cash flow hedges: energy derivative contracts to hedge the sale of power; interest rate swaps to hedge the variability in cash flows or future cash flows related to a variable rate asset or liability; and equity derivatives to hedge the long-term compensation arrangements. For the year ended December 31, 2013, pre-tax net unrealized gains of $29 million (2012 – loss of $36 million) were recorded in other comprehensive income for the effective portion of the cash flow hedges. As at December 31, 2013, there was a net unrealized derivative asset balance of $30 million relating to derivative contracts designated as cash flow hedges (2012 – liability of $272 million). The unrealized losses on cash flow hedges are expected to be realized in net income by 2024. 

ii. Net Investment Hedges 

The company uses foreign exchange contracts and foreign currency denominated debt instruments to manage its foreign currency exposures arising from net investments in foreign operations. For the year ended December 31, 2013, unrealized pre-tax net gains of $1 million (2012 – losses of $207 million) were recorded in other comprehensive income for the effective portion of hedges of net investments in foreign operations. As at December 31, 2013, there was a net unrealized derivative liability balance of $70 million relating to derivative contracts designated as net investment hedges (2012 – $79 million). 

