Accounting Policy Changes
Effective January 1, 2013, IAS 19, Employee Benefits, was revised to eliminate the option to defer recognition of gains and losses, known as the "corridor method", and to enhance disclosure requirements for defined benefit plans. As the Company did not choose the corridor method in accounting for its defined benefit plans, there is no impact on its financial statements as a result of the elimination of this option.
Application of this standard also impacts the calculation of finance costs, resulting in an increase to Production expense and Finance costs in the Statement of Earnings, which will be fully offset by an increase (decrease) in Defined benefit plan actuarial gains (losses) in the Statement of Comprehensive Income. Prior to this standard, the impact of defined benefit plans on Net earnings included an interest cost on the obligation using the discount rate (based on current bond yields), and a credit on the plan assets using the expected rate of return (based on long term expected bond and equity returns). Under the new standard, the credit on plan assets no longer recognizes the equity risk premium and is based on the discount rate only.
The policy has been applied on a retrospective basis and comparative information has been restated.
Effective January 1, 2013, IFRS 13, Fair Value Measurement, replaced the fair value measurement guidance contained in individual IFRSs with a single source of fair value measurement guidance and established new requirements for fair value measurements and disclosures. The new standard is applied prospectively and will require more extensive disclosure, but has no impact on the Company's financial information.
IFRS Future Changes
IFRS 9, Financial Instruments, replaces the multiple classification and measurement models in IAS 39, Financial Instruments: Recognition and Measurement, with a single model that has only two classification categories: amortized cost and fair value. This standard is in effect for accounting periods beginning on or after January 1, 2015, with earlier adoption permitted. The Company does not expect this standard to have a significant effect on its financial statements.
The standard-setting bodies that set IFRS have significant ongoing projects that could impact the IFRS accounting policies selected. Specifically, it is anticipated that there will be additional new or revised IFRS or IFRIC standards in relation to financial instruments and leases currently on the International Accounting Standards Board agenda.
Controls and Procedures
There were no changes in the Company's internal controls over financial reporting ("ICFR") during the quarter ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, the Company's ICFR. As of March 31, 2013, the newly acquired Georgia operations were in compliance with the Company's ICFR.
Critical Accounting Estimates
There were no material changes to the Company's critical accounting estimates during the quarter ended March 31, 2013. For a full discussion of critical accounting estimates, please refer to the Company's discussion in its MD&A for the year ended December 31, 2012 as filed on SEDAR at www.sedar.com.
The U.S. housing sector is projected to continue its recovery through 2013 while Canadian housing starts are projected to slow. In terms of offshore markets, building activity in Japan is expected to gain momentum in 2013 in anticipation of a planned increase in that country's consumption tax in early 2014. Demand for lumber in China is expected to continue to grow in spite of a slowing in demand for other commodities.
Most Popular Stories
- 15 Myths That Could Ruin Your Hispanic Ad Campaign
- General Motors Names Mary Barra as First Female CEO
- Cold Dis-comfort: Antarctica Set Record of -135.8
- Obama Delivers Speech at Mandela Memorial: Transcript
- Uruguay Gets Ready for Legal Marijuana
- Oldaker Takes Center Stage at Entrepreneur Awards
- Slow Week Ahead of December FOMC Meeting
- Hispanics Seek to Grow School Board Members
- Russia Says Nyet to Canada North Pole Claim
- 'Knockout Game': Myth or Menace?