In October 2011, the IASB issued an interpretation which clarifies the accounting requirement for waste removal costs incurred in the production phase of a surface mine (stripping costs). IFRIC 20 addresses (a) when stripping costs are recognized as an asset, (b) where the costs should be classified on the statement of financial position, and (c) the initial and subsequent measurement of the asset. The Company does not expect that the adoption of this interpretation will have a material effect on the consolidated financial statements, as it is substantially aligned with the Company’s current policies. This interpretation is effective for annual periods beginning on or after January 1, 2013 and is to be applied prospectively. Earlier application is permitted. In December 2011, the IASB issued amendments to IFRS 7 which identify enhanced disclosure requirements for the actual and potential effects of netting arrangements on the entity’s financial position. The adoption of the amendments to IFRS 7 will result in additional disclosure to the Company’s consolidated financial statement disclosures. The amendments are effective for annual periods beginning on or after January 1, 2013 and are to be applied retrospectively. Earlier application is permitted. In December 2011, the IASB issued amendments to IAS 32 which clarifies the criteria for offsetting financial assets and liabilities. Capital Power does not expect that the adoption of the amendments will have a material effect on the consolidated financial statements as they are substantially aligned with the Company’s current policies. The amendments are effective for annual periods beginning on or after January 1, 2014 and are to be applied retrospectively. Earlier application is permitted. In November 2009, the IASB issued IFRS 9 which addresses the classification and measurement requirements of financial assets. The standard was amended in October 2010 to include the requirements for the classification and measurement of financial liabilities. The changes are effective for annual periods beginning on or after January 1, 2015 and are to be applied retrospectively. Earlier application is permitted. In May 2011, the IASB issued IFRS 10 which replaces IAS 27 Consolidated and Separate Financial Statements and Standing Interpretations Committee (SIC) 12 Consolidation – Special Purpose Entities . IFRS 10 establishes principles for the presentation and preparation of consolidated financial statements. The new standard provides a revised definition of control and a single consolidation model as the basis for consolidation for all types of entities. The new standard also provides additional guidance to assist in the determination of control. Capital Power does not expect that the adoption of this new standard will have a material effect on the consolidated financial statements. Application of the new definition of control is not expected to require a change in the Company’s accounting treatment for entities in which it holds an interest. IFRS 10 is effective for annual periods beginning on or after January 1, 2013 and is to be applied retrospectively. Earlier application is permitted but must be applied simultaneously with IFRS 11 and IFRS 12. IFRS 11 was issued in May 2011 and supersedes IAS 31 Interests in Joint Ventures and SIC 13 Jointly Controlled Entities – Non-Monetary Contributions by Venturers . The standard classifies joint arrangements as joint operations or joint ventures. Joint operations are arrangements where the jointly controlling parties have rights to the assets and obligations for the liabilities of the joint arrangement. The joint operators will account for their respective shares of the arrangement using the proportionate consolidation method. Joint ventures are arrangements where the parties with joint control have rights to the net assets of the arrangement. IFRS 11 eliminates the choice to account for joint ventures using the proportionate consolidation method and instead requires the equity method of accounting. The Company does not expect that the adoption of this new standard will have a material effect on the consolidated financial statements, as it is substantially aligned with the Company’s current practice. IFRS 11 is effective for annual periods beginning on or after January 1, 2013 and is to be applied retrospectively. Earlier application is permitted but must be applied simultaneously with IFRS 10 and IFRS 12. International Financial Reporting Standards Interpretations Committee (IFRIC) 20 Stripping Costs in the Production Phase of a Surface Mine International Financial Reporting Standard (IFRS) 7 Financial Instruments: Disclosures and IAS 32 Financial Instruments: Presentation IFRS 9 Financial Instruments IFRS 10 Consolidated Financial Statements IFRS 11 Joint Arrangements Capital Power Corporation Management’s Discussion and Analysis 2012 57