2023 Consolidated Financial Statements and Notes
AIR CANADA
2023 Consolidated Financial Statements and Notes
December 31,
2023
Following is a classification of fair value measurements recognized in the consolidated statement of financial position
using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.
Fair value measurements at reporting date using:
Significant
unobservable
Recurring measurements
(Canadian dollars in millions)
Quoted prices in
active markets for
identical assets
(Level 1)
Significant other
observable inputs
(Level 2)
inputs (Level 3)
Financial Assets
Held-for-trading securities
Cash equivalents
$
364
$
$
364
$
Short-term investments
5,734
5,734
Long-term investments
744
744
Equity investment in Chorus
40
40
Derivative instruments
Foreign exchange derivatives
14
14
Total
$
6,896
$
40
$
6,856
$
Financial Liabilities
Derivative instruments
Foreign exchange derivatives
$
179
Embedded derivative on convertible
notes
Total
56
$
235
$
179
56
$
235
$
Financial assets held by financial institutions in the form of cash and restricted cash have been excluded from the fair
value measurement classification table above as they are not valued using a valuation technique.
The Corporation's policy is to recognize transfers into and transfers out of fair value hierarchy levels as of the date of
the event or change in circumstances that caused the transfer. There were no transfers within the fair value hierarchy
during 2023.
Offsetting of Financial Instruments in the Consolidated Statement of Financial Position
Financial assets and liabilities are offset and the net amount reported in the consolidated statement of financial position
where the Corporation has a legally enforceable right to set-off the recognized amounts and there is an intention to
settle on a net basis or realize the asset and settle the liability simultaneously. In the normal course of business, the
Corporation enters into various master netting arrangements or other similar arrangements that do not meet the criteria
for offsetting in the consolidated statement of financial position but still allow for the related amounts to be set-off in
certain circumstances, such as the termination of the contracts or in the event of bankruptcy or default of either party
to the agreement.
Air Canada participates in industry clearing house arrangements whereby certain accounts receivable balances related
to passenger, cargo and other billings are settled on a net basis with the counterparty through the clearing house.
These billings are mainly the result of interline agreements with other airlines, which are commercial agreements that
enable the sale and settlement of travel and related services between the carriers. Billed and work in process interline
receivables are presented on a gross basis and amount to $126 million as at December 31, 2023 ($112 million as at
December 31, 2022). These balances will be settled at a net value at a later date; however, such net settlement amount
is unknown until the settlement date.
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