IAS 19 - Employee Benefits, amendments
IAS 19 amendments were issued in June 2011 that will change the accounting and disclosure for defined benefit plans and termination benefits. This standard requires that the changes in defined benefit obligations are recognized as they occur, eliminating the corridor approach and accelerating the recognition of past service costs. The changes in defined benefit obligations and plan assets are to be disaggregated into three components: service costs, net interest on the net defined benefit liabilities (assets) and re-measurements of the net defined benefit liabilities (assets). This standard must be applied for accounting periods beginning on or after January 1, 2013. Subsequent to the year ended December 31, 2012, Superior adopted IAS 19 on January 1, 2013 and this will have a financial impact on Superior's 2012 and first-quarter 2013 results. For 2012 the financial impact is an increase of $3.1 million to pension expense and a corresponding decrease to Accumulated Other Comprehensive Loss (AOCL). The impact on Superior's balance sheet as at January 1, 2012 is a $4.1 million increase to retained deficit and a corresponding decrease to AOCL.
Superior adopted the following standard on January 1, 2012:
IFRS 7 - Financial Instruments: Disclosures, amendments regarding disclosures - Transfer of Financial Assets;
In December 2011, the IASB and the Financial Accounting Standards Board ("FASB") amended IFRS 7 - Financial Instruments: Disclosures to require quantitative and qualitative disclosure for transfers of financial assets where the transferred assets are not derecognized in their entirety or the transferor retains continuing managerial involvement. The amendment also requires disclosure of supplementary information if a substantial portion of the transfer activity occurs in the closing days of a reporting period. Superior's adoption of the IFRS 7 amendments on July 1, 2012 did not impact Superior.
IAS 12 - Income Taxes, amendments regarding Deferred Tax: Recovery of Underlying Assets
IAS 12 was amended in December 2010 to remove subjectivity in determining on which basis an entity measures the deferred tax relating to an asset. The amendment introduces a presumption that an entity will assess whether the carrying amount of an asset will be recovered through the sale of the asset. Superior's adoption of IAS 12 amendments on Januray 1, 2012 did not affect its financial results or financial position.
3. Seasonality of Operations
Sales typically peak in the first quarter when approximately one-third of annual propane and other refined fuels sales volumes and gross profits are generated due to the demand from heating end-use customers. They then decline through the second and third quarters rising seasonally again in the fourth quarter with heating demand. Similarly, net working capital is typically at seasonally high levels during the first and fourth quarters, and normally declines to seasonal low in the second and third quarters. Net working capital is also significantly influenced by wholesale propane prices and other refined fuels.
Construction Products Distribution
Sales typically peak during the second and third quarters with the seasonal increase in building and renovation activities. They then decline through the fourth quarters and into the subsequent first quarter. Similarly, net working capital is typically at seasonally highs levels during the second and third quarters, and normally decline to seasonally lows in the fourth and first quarters.
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