2023 Consolidated Financial Statements and Notes
AIR CANADA
2023 Consolidated Financial Statements and Notes
6. INTANGIBLE ASSETS
(Canadian dollars in millions)
Year ended December 31, 2022
At January 1, 2022
Additions
Amortization
At December 31, 2022
At December 31, 2022
Cost
Accumulated amortization
Year ended December 31, 2023
At January 1, 2023
Additions
Amortization
At December 31, 2023
At December 31, 2023
Cost
Accumulated amortization
International
route rights and
slots
Contract-
based
Marketing-
based trade
names
Technology-
based
(internally
developed)
Total
$
97
69
69
$
167
$
178
$
638
$
1,080
99
99
(19)
97
$
148
$
(106)
(125)
178
SA
$
631
$
1,054
EA
SA
97
$
225
178
EA
$
1,106
$
1,606
(77)
(475)
(552)
97
EA
$
148
$
178
$
631
$
1,054
$
97
$
EA
SA
$
97
148
178
$
631
$
1,054
156
156
(19)
EA
$
129
$
178
$
(107)
(126)
SA
680
$
1,084
97
$
225
178
$
1,259
$
1,759
(96)
(579)
(675)
97
$
129
178
$
680
$
1,084
In 2023, technology-based assets with cost and accumulated amortization of $3 million (2022 - $14 million) were
retired.
International route rights and slots are pledged as security for Senior Secured Notes and debt as described in Note 8.
Impairment Assessment of Indefinite Lived Intangibles
Due to the recoverable amount of the cash-generating units exceeding their respective carrying values by an aggregate
amount of approximately $13 billion, the most recent calculation from the 2021 period was carried forward and used in
the impairment test in the current period. Management considered reasonably possible changes in key assumptions
using multiple modelling scenarios and sensitivity analysis and determined such changes would not cause the
recoverable amount of each CGU to be less than the carrying value. In addition, management has updated the
impairment review to take into account the most recent projections from the annual business plan and these did not
impact this conclusion.
The assessment of the recoverable amount of the Corporation's cash-generating units compared to their carrying
values was performed based on cash flow projections prepared in 2021. This review was performed in conjunction with
the annual impairment review conducted on all intangible assets that have an indefinite life. The allocation of the
indefinite lived intangible assets to the cash-generating units was $165 million to wide-body aircraft and $110 million
to narrow-body aircraft. The recoverable amount of the cash-generating units was measured based on fair value less
cost to dispose, using a discounted cash flow model. The discounted cash flow model represents a level 3 fair value
measurement within the IFRS 13 fair value hierarchy. The cash flows are management's best estimates using current
and anticipated market conditions covering a five-year period.
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