2022-23 SGI CANADA Annual Report
Statement of Financial Position classification
The Consolidated Statement of Financial Position has been prepared on a non-classified basis broadly in order of liquidity.
Functional and presentation currency
These consolidated financial statements are presented in Canadian dollars, which is the Corporation's functional currency.
Use of estimates and judgment
The preparation of the consolidated financial statements in accordance with IFRS requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these estimates and changes in estimates
are recorded in the accounting period in which they are determined. The most significant estimation processes
are related to the actuarial determination of the provision for unpaid claims and unpaid claims recoverable from
reinsurers (note 10), the valuation of accounts receivable (note 5), employee future benefits (note 19) and the fair
value of investments classified as Level 3 (note 6).
3. Significant Accounting Policies
Basis of consolidation
The consolidated financial statements include the accounts of the Corporation and the consolidated accounts
of its 100%-owned subsidiaries, SCISL and Coachman. All inter-company accounts and transactions have been
eliminated on consolidation. While Coachman and SCISL's year-ends are both December 31, their financial accounting
records have been consolidated using the same fiscal period as the Corporation. The financial accounting records of
the Corporation and its subsidiaries are prepared using consistent accounting policies.
Financial assets and liabilities
The measurement basis for financial assets is determined at initial recognition and depends on whether the financial
assets have been classified as amortized cost, fair value through other comprehensive income (FVOCI), or fair value
through profit or loss (FVPL). The classification requirements for financial asset debt and equity instruments are
described as follows:
Debt instruments
Debt instruments are those instruments that meet the definition of a financial liability from the issuer's perspective,
such as loans, government and corporate bonds and trade receivables. Financial assets that are held for collection
of contractual cash flows where those cash flows represent solely payments of principal and interest, and that are
not designated at FVPL, are measured at amortized cost using the effective interest method, less provision for
impairment losses, if any. Financial assets that are held for collection of cash flows and for selling the assets, where
the assets' cash flows represent solely payments of principal and interest, and that are not designated at FVPL, are
classified as FVOCI. Financial assets classified as FVOCI are measured at fair value with changes in fair value recorded
in other comprehensive income (OCI); except for the recognition of impairment gains or losses, interest revenue, and
foreign exchange gains and losses on the instrument's amortized cost, which are recognized in net income. Financial
assets not measured at amortized cost, or at FVOCI must be classified as FVPL. Financial assets classified as FVPL are
measured at fair value and changes in fair value are recognized in net income.
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