CAPITAL POWER CORPORATION 2. Significant accounting policies, continued: Notes to the Consolidated Financial Statements (Tabular amounts in millions of Canadian dollars, except share and per share amounts) (w) Future accounting changes, continued: IFRS 13 – Fair Value Measurement – In May 2011, the IASB issued IFRS 13 which defines fair value, sets out in a single IFRS a framework for measuring fair value and enhances disclosures about fair value measurements. IFRS 13 applies to fair value measurements required or permitted by other IFRSs, but does not (a) introduce any new requirements to measure an asset or a liability at fair value, (b) change what is measured at fair value in IFRSs, or (c) address how to present changes in fair value. The adoption of this new standard is expected to affect the Company’s fair value disclosures for financial instruments and asset impairment calculations. IFRS 13 is effective for annual periods beginning on or after January 1, 2013 and is to be applied prospectively. Earlier application is permitted. IAS 19 – Employee Benefits – In June 2011, the IASB issued an amendment to IAS 19 which introduced changes related to: (a) eliminating the option to defer the recognition of actuarial gains and losses, known as the corridor method, (b) requiring a new method of calculating finance costs on defined benefit plans where a single discount rate is applied to the net pension assets or obligations, and (c) requiring enhanced disclosures regarding the characteristics and associated risks of the Company’s defined benefit plans. Capital Power expects that the adoption of this new standard will have an immaterial effect on its consolidated financial statements. Amendments to IAS 19 are effective for annual periods beginning on or after January 1, 2013 and are to be applied retrospectively. Earlier application is permitted. International Financial Reporting Standards Interpretations Committee (IFRIC) 20 – Stripping Costs in the Production Phase of a Surface Mine – 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. IAS 32 – Financial Instruments: Presentation – 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. IFRS 9 – Financial Instruments – In November 2009, the IASB issued IFRS 9 – Financial Instruments 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. 92