79  /  CP 2018 ANNUAL REPORT In preparation for adoption of the new standard, in January 2019, the Company implemented internal controls and a lease management system to assist in delivering the required accounting changes. To facilitate transition, the Company expects to make policy choices to utilize available practical expedients provided by the new standard, including the: The Company has substantially completed its assessment of the impact of this new standard, and expects net increases of approximately $400 million to assets and liabilities associated primarily with the recognition of ROU assets and liabilities for operating leases. The Company expects no impact on the Consolidated Statements of Income and a minimal net impact to retained earnings. Additional disclosures will be provided in the Company's first quarter 2019 financial statements. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments under FASB ASC Topic 326, Financial Instruments - Credit Losses. This new standard intends to replace the incurred loss impairment methodology under GAAP with a methodology that reflects using a forward- looking expected credit loss model for accounts receivables, loans, and other financial instruments, and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates. The amendments are effective for the Company beginning on January 1, 2020. Entities are required to apply the amendments in this update using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently evaluating the impact on the consolidated financial statements from the adoption of this ASU. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment under FASB ASC Topic 350, Intangibles - Goodwill and Other. This is intended to simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The amendments are effective for the Company beginning on January 1, 2020. Entities are required to apply the amendments in this update prospectively from the date of adoption. The Company does not anticipate that the adoption of this ASU will impact its financial statements as there is a sufficient excess between the fair value and carrying value of the Company's goodwill. Furthermore the Company expects to continue to apply the Step 0 qualitative assessment when testing for goodwill impairment. The following table disaggregates the Company’s revenues from contracts with customers by major source: $^{(1)}$ Prior years amounts have not been adjusted under the modified retrospective method (Note 2). 3 Revenues Financial Instruments - Credit Losses Intangibles – Goodwill and Other • Off-balance sheet treatment for leases with a term of 12 months or less. • Combination of lease and non-lease components as a single lease component for all lease classes, except for leases identified within engineering service agreements; and • Acceptance of the previous accounting treatment for land easements where Topic 840 was not applied; • Acceptance of the package of practical expedients, permitting the Company not to reassess lease existence, classification and capitalization of initial direct costs previously determined under Topic 840; (in millions of Canadian dollars) 2018 2017 (1) 2016 (1) Freight Grain $ 1,566 $ 1,532 $ 1,480 Coal 673 631 606 Potash 486 411 338 Fertilizers and sulphur 243 241 284 Forest products 284 265 275 Energy, chemicals and plastics 1,243 898 852 Metals, minerals, and consumer products 797 739 564 Automotive 322 293 350 Intermodal 1,538 1,365 1,311 Total freight revenues 7,152 6,375 6,060 Non-freight excluding leasing revenues 102 117 113 Revenues from contracts with customers 7,254 6,492 6,173 Leasing revenues 62 62 59 Total revenues $ 7,316 $ 6,554 $ 6,232