ENMAX Corporation
141 – 50 Avenue SE
Calgary, AB T2G 4S7
Tel (403) 514-3000
enmax.com
January 5, 2012
International Accounting Standards Board
30 Cannon Street
London EC4M 6XH
UNIITED KINGDOM
Via “Open to Comment” page, www.iasb.org
Re: Exposure Draft “Government Loans – Proposed amendments to IFRS 1”, dated October 2011
Dear Sir or Madam:
We are writing in response to your request for comments on the Exposure Draft “Government Loans –
Proposed amendments to IFRS 1” dated October 2011.
ENMAX Corporation (ENMAX) is an energy distribution, supply and service company. We're a wholly owned
subsidiary of The City of Calgary, headquartered in Calgary, Canada. ENMAX operates and competes in
Alberta's restructured electricity industry where ENMAX and its predecessors have provided Albertans with safe
and reliable electricity for more than 100 years. Our core operations include electricity generation, transmission
and distribution and the sale of electricity, natural gas and renewable energy products to residential,
commercial, institutional and industrial customers.
ENMAX supports the IASB’s proposed amendments to IFRS 1 in requiring first time adopters to apply
certain requirements in IAS 20 Accounting for Government Grants and Disclosure of Government
Assistance prospectively. The proposed amendments to IFRS 1 will help eliminate situations where the
data required to fair value the original loan at the transaction date may not be reliably determinable. We
believe that the proposed amendment will reduce the risk of misrepresenting government loan balances
on the date of transition.
ENMAX appreciates the opportunity to be involved in this process. Our responses to each of the questions are
included in the appendix attached to this letter. If you have any questions, please contact me at (403) 5141649. Thank you again for the opportunity to provide comments on this exposure draft.
Sincerely,
Melanie Litoski, CA
VP, Financial Reporting
Appendix: ENMAX Corporation’s responses to the questions raised in the Exposure Draft
Question 1:
The Board proposes to amend IFRS 1 so that first-time adopters would be required to apply
paragraph 10A of IAS 20 prospectively to loans entered into on or after the date of transition to
IFRSs, unless the information needed to apply these requirements to a government loan as a
result of a past transaction was obtained at the time of initially accounting for that loan. Do you
agree? Why or why not?
We agree with the proposed amendment that would require first-time adopters to apply IAS 20.10A
prospectively to loans entered into on or after the date of transition to IFRS. IAS 20 contains the
requirement for government loans with a below-market rate of interest to be measured at fair value on
initial recognition. The general requirements under IFRS 1 for first time adopters to apply IFRSs
retrospectively at the date of transition may lead to difficulties in producing reliable information when
determining the unobservable inputs for calculating a fair value on the date of the original loan
transaction. As a result, the risk of misrepresenting the value of outstanding government loans on the
date of transition is increased. The proposed amendment requiring first-time adopters to apply the fair
value requirement in IAS20.10A prospectively will help to mitigate the risks related to retrospective
application under conditions of uncertainty.
Question 2:
Do you have any other comments on the proposals?
We do not have any additional comments on the proposal at this time.