NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Classification and Measurement
We measure financial instruments by grouping them into classes on
initial recognition, based on the purpose of the individual instruments.
We classify all of our non-derivative financial assets as either available-
for-sale or loans and receivables. We classify non-derivative financial
liabilities as other financial liabilities.
 Available-for-sale financial assets – include our publicly traded and
private investments. We initially measure these assets at fair value
plus transaction costs directly attributable to acquiring them, and
record them on the consolidated statements of financial position. We
record subsequent changes in their fair value, other than impairment
losses, in other comprehensive income. When we dispose of the
assets, we reclassify the cumulative change in fair value recorded in
the available-for-sale financial assets reserve to net income.
 Loans and receivables – includes accounts receivable. We initially
measure these assets at fair value plus transaction costs directly
attributable to acquiring them, and then at amortized cost using the
effective interest method, recording changes through net income.
 Other financial liabilities – includes short-term borrowings, accounts
payable and accrued liabilities, and long-term debt. We initially
measure these liabilities at fair value plus transaction costs directly
attributable to issuing them, and then at amortized cost using the
effective interest method.
Fair Value
We estimate fair values at a specific point in time, based on relevant
market information and information about the financial instruments.
Our estimates are subjective and involve uncertainties and significant
judgment. Changes in assumptions could significantly affect the
estimates.
Current and Non-Current Classification
We classify financial assets and financial liabilities as non-current when
they are due in part or in whole more than one year from the date of
the consolidated statements of financial position. All other financial
assets and liabilities, including the portion of long-term liabilities due
within one year from the date of the consolidated statements of
financial position, are classified as current liabilities.
Offsetting Financial Assets and Liabilities
We offset financial assets and financial liabilities and present the net
amount in the consolidated statements of financial position when we
have a legal right to offset them and intend to settle on a net basis or
realize the asset and liability simultaneously.
Derivative Instruments
We use derivative instruments to manage risks related to certain activities we are involved with. They include:
The risk they manage Types of derivative instruments
Debt Derivatives  Impact of fluctuations in foreign exchange rates on principal
and interest payments for US denominated long-term debt
 Cross-currency interest rate exchange agreements
 Forward foreign exchange agreements (from time to time
as necessary)
Expenditure Derivatives  Impact of fluctuations in foreign exchange rates on forecasted
US dollar denominated expenditures
 Forward foreign exchange agreements
Equity Derivatives  Impact of fluctuations in share price on stock-based
compensation expense
 Total return swap agreements
We use derivatives only to manage risk, and not for speculative
purposes.
We record all derivatives on our consolidated statements of financial
position at their estimated fair value. We record changes in the
estimated fair value of derivative instruments that are effective
accounting hedges in other comprehensive income until the hedged
item impacts net income. Hedge ineffectiveness is recognized in net
income immediately. Any changes in the estimated fair value of
derivative instruments that have not been designated as hedging
instruments for accounting purposes are recognized immediately in net
income.
When we designate a derivative instrument as a hedging instrument for