| Business Combinations (Policies) | 12 Months Ended |
| Dec. 31, 2018 |
| Text block [abstract] | |
| Business Combination | Accounting Policies Accounting Estimates and Judgments
• The acquisition method is followed.
• Consideration is measured at the aggregate of
the fair values of assets transferred, liabilities incurred or
assumed, and equity instruments issued in exchange for control of
the acquiree at the acquisition date.
• The acquisition date is the date the Company
obtains control over the acquiree.
• Identifiable assets acquired and liabilities
assumed are generally measured at fair value.
• Acquisition-related costs are recognized in
net earnings as incurred.
• The excess of total consideration for each
acquisition plus non-controlling
• Purchase price allocation involves judgment in
identifying assets acquired and liabilities assumed and estimation
of their fair values.
• Judgment is required to determine which entity
is the acquirer in a merger of equals. In identifying PotashCorp as
the acquirer, the companies considered the voting rights of all
equity instruments, the intended corporate governance structure of
the combined company, the intended composition of senior management
of the combined company and the size of each of the companies. In
assessing the size of each of the companies, the companies
evaluated various metrics. No single factor was the sole
determinant in the overall conclusion that PotashCorp is the
acquirer for accounting purposes; rather, all factors were
considered in arriving at the conclusion. |
| Operating Segments | Accounting
Policies
Accounting
Estimates and Judgments
Operating Segments
Prior to the Merger, the Company identified the Chief Executive
Officer as the Chief Operating Decision Maker (“CODM”)
under IFRS and used gross margin to measure the segments’
profit or loss. The operating segments were limited to the
following: Potash, Nitrogen and Phosphate. The changes in the
structure of the Company’s internal organization as a result
of the Merger caused the composition of the operating segments to
change as well as who the Company identified to be the CODM.
Post-Merger, the Company identified the Executive Leadership Team
(“ELT”), comprised of officers at the Executive Vice
President level and above, as the CODM. The CODM uses net (loss)
earnings before finance costs, income taxes, and depreciation and
amortization (“EBITDA”) to measure performance and
allocate resources to the operating segments. The CODM believes
EBITDA to be an important measure as it excludes the effects of
items that primarily reflect the impact of long-term investment and
financing decisions, rather than the performance of the
Company’s day-to-day
In 2019, the Company’s CODM reassessed product groupings and
decided to evaluate the performance of sulfate products as part of
the Nitrogen segment, rather than the Phosphate and Sulfate
segment; therefore, future comparative figures will be restated for
the change in the composition of the segments, which will result in
an increase in the Nitrogen segment and a decrease in the Phosphate
and Sulfate segment. For the year ended December 31, 2018, this
change will be approximately $121, $42, and $69 in sales, gross
margin and EBITDA, respectively.
Operating Segments
Judgment is used in determining the composition of the reportable
segments based on factors including risks and returns, internal
organization, and internal reports reviewed by the CODM.
Certain expenses are allocated across segments based on an
appropriate basis such as production capacities or historical
trends. |
| Revenue | Accounting
Policies
Accounting Estimates and Judgments
• Seed – various third-party supplier seed
brands and proprietary seed product lines;
• Merchandise – sales of fencing, feed
supplements, livestock-related animal health products, storage and
irrigation equipment, and other products; and
• Services and other revenues – sales of
product application, soil and leaf testing, crop scouting and
precision agriculture services, financial services and livestock
marketing.
Provisions for returns, trade discounts and rebates are deducted
from sales revenue.
Potash, Nitrogen, and Phosphate and
Sulfate
The Company manufactures and sells potash, nitrogen, and phosphate
and sulfate products. While agriculture is the Company’s
primary market, it also produces products for animal nutrition and
industrial uses.
The Company’s sales revenue is recorded and measured based on
the “freight on board” mine, plant, warehouse or
terminal price specified in the contract (except for certain vessel
sales or specific product sales that are shipped and recorded on a
delivered basis), which reflects the consideration the Company
expects to be entitled to in exchange for the goods or services,
net of any variable consideration (e.g., any trade discounts or
estimated volume rebates). Where volume rebates are provided for in
customer contracts, the Company estimates revenue at the earlier of
the most likely amount of consideration expected to be received or
when the consideration becomes fixed. The Company’s customer
contracts may provide certain product quality specification
guarantees but do not generally provide for refunds or returns.
Sales prices are based on North American and International
benchmark market prices which are variable and subject to global
supply and demand, and competitive factors.
Potash Nitrogen Phosphate and Sulfate
Products
• North American –
primarily granular
• Offshore (International) –
primarily granular and standard
• Ammonia, urea, urea ammonium nitrate, and
industrial grade ammonium nitrate
• Solid fertilizer, liquid fertilizer,
industrial products and feed products
Sales prices impacted by
• North American prices referenced at
delivered prices (including transportation and distribution
costs)
• International prices referenced at the mine
site (excluding transportation and distribution costs)
• Global energy costs and supply
• Global ammonia and sulfur costs and supply
Other
The Company does not provide general warranties. Intersegment sales
are made under terms that approximate market value. Transportation
costs are generally recovered from the customer through sales
pricing.
Seasonality in the Company’s business results from increased
demand for products during planting season. Crop input sales are
generally higher in spring and fall crop input application seasons.
Crop nutrient inventories are normally accumulated leading up to
each application season. The Company’s cash collections
generally occur after the application season is complete while
customer prepayments are concentrated in December and January. |
| Cost of goods sold | Cost of goods sold represents the cost of purchasing products for
resale and costs primarily incurred at, and charged to, producing
facilities. |
| Selling and general and administrative expenses |
The primary components of selling and general and administrative
expenses are compensation, other employee costs, depreciation and
amortization, other operating leases and fleet fuel, repairs and
maintenance. |
| Income Taxes | Accounting
Policies Accounting Estimates and Judgments
The Company operates in a specialized industry and in several tax
jurisdictions. As a result, its income is subject to various rates
of taxation. Taxation on items recognized in the consolidated
statements of earnings, other comprehensive income
(“OCI”) or contributed surplus is recognized in the
same location as those items.
Taxation on (loss) earnings is comprised of current and deferred
income tax.
Estimates and judgments to determine the Company’s taxes are
impacted by:
• the breadth of the Company’s operations;
and
• global complexity of tax regulations.
The final taxes paid, and potential adjustments to tax assets and
liabilities, are dependent upon many factors including:
• negotiations with taxation authorities in
various jurisdictions;
• outcomes of tax litigation; and
• resolution of disputes arising from federal,
provincial, state and local tax audits.
Estimates and judgments are used to recognize the amount of
deferred tax assets, which:
• includes the probability that future taxable
profit will be available to use deductible temporary differences,
and could be reduced if projected earnings are not achieved or
increased if earnings previously not projected become probable.
Current income tax is: Deferred income tax
is:
• the expected tax payable on the taxable
earnings for the year;
• calculated using rates enacted or
substantively enacted at the dates of the consolidated balance
sheets in the countries where the Company’s subsidiaries,
held for sale investees and equity-accounted investees operate and
generate taxable earnings; and
• inclusive of any adjustment to income tax
payable or recoverable in respect of previous years.
• recognized using the liability method;
• based on temporary differences between
financial statements’ carrying amounts of assets and
liabilities and their respective income tax bases; and
• determined using tax rates that have been
enacted or substantively enacted by the dates of the consolidated
balance sheets and are expected to apply when the related
deferred income tax asset is realized or the deferred income tax
liability is settled.
Uncertain income tax positions are accounted for using the
standards applicable to current income tax liabilities and assets,
i.e., both liabilities and assets are recorded when probable and
measured at the amount expected to be paid to (recovered from) the
taxation authorities using the Company’s best estimate of the
amount.
Deferred income tax is not accounted for:
• with respect to investments in subsidiaries
and equity-accounted investees where the Company is able to control
the reversal of the temporary difference and that difference is not
expected to reverse in the foreseeable future; and
• if arising from initial recognition of an
asset or liability in a transaction, other than a business
combination, that at the time of the transaction affects neither
accounting nor taxable profit or loss.
The realized and unrealized excess tax benefits from share-based
payment arrangements are recognized in contributed surplus as
current and deferred tax, respectively.
Deferred income tax assets are reviewed at each balance sheet date
and amended to the extent that it is no longer probable that the
related tax benefit will be realized.
Income tax assets and liabilities are offset when:
For current income taxes, the Company has: For deferred income
taxes:
• a legally enforceable right to offset the
recognized amounts 1
• the intention to settle on a net basis or
realize the asset and settle the liability simultaneously.
• the Company has a legally enforceable right to
set off current tax assets against current tax liabilities; and
• they relate to income taxes levied by the same
taxation authority on either: 1) the same taxable entity; or 2)
different taxable entities intending to settle current tax
liabilities and assets on a net basis, or realize assets and settle
liabilities simultaneously in each future
period. 2
1 For income taxes levied by the same taxation
authority and the authority permits the Company to make or receive
a single net payment or receipt.
2 In which significant amounts of deferred tax
liabilities or assets expected are to be settled or recovered. |
| Assets Held for Sale and Discontinued Operations | Accounting Policies Accounting Estimates and Judgments
The Company classifies assets and liabilities as held for sale if
it is highly probable that the carrying value will be recovered
through a sale transaction within one year rather than through
continuing use.
Discontinued operations represent a component of the
Company’s business that either has been disposed of, or is
classified as held for sale, and represents a separate major line
of business or geographic area of operations or is a part of a
single coordinated plan to dispose of a separate major line of
business or geographical area of operations.
The Company’s significant policies include:
• cessation of equity accounting for associates
and joint ventures at the date the investments were classified as
held for sale;
• measurement of assets at the lower of carrying
amount and fair value less costs to sell, with the exception of
financial assets measured at FVTOCI;
• unrealized gains and losses on remeasurement
of investments measured at FVTOCI are recorded, net of related
income taxes, to OCI;
• dividends received are recorded on the
consolidated statements of earnings; and
• the comparative statements of earnings and OCI
are restated as if the operation had been discontinued from the
start of the comparative year.
Expected cost to sell the investments requires estimation, which is
based on several factors such as historical trends of similar types
of investments sold, the percentage of investments held relative to
the total shares in circulation and the type of the investment.
Judgment involves determining:
• whether the highly probable standard is met
and the date when equity accounting ceases; and
• if the business component for sale or disposal
meets the criteria of a discontinued operation. |
| Cash Flow | Accounting Policy
Highly liquid investments with a maturity of three months or less
from the date of purchase are considered to be cash
equivalents. |
| Financial Instruments and Related Risk Management | Accounting Policies Accounting Estimates and Judgments
Financial instruments are classified and measured as follows: Judgment is required
to determine whether the right to offset is legally
enforceable.
Fair
Value FVTOCI Financial Assets and 1 For derivatives or embedded
derivatives, the most
Instrument type Cash and cash equivalents and derivatives Equity investments not held for trading Receivables, short-term debt, payables and accrued
charges, long-term debt, other long-term debt instruments
Measurement Fair value Fair value Amortized cost
Fair value gains and losses Profit or loss OCI 2 –
Interest and dividends Profit or loss Profit or loss Profit or loss: effective interest rate
Impairment of assets – – Profit or loss
Foreign exchange Profit or loss OCI Profit or loss
Transaction costs Profit or loss OCI Included in cost of instrument
1 Amortized cost is applied if the objective of the
business model for the instrument or group of instruments is to
hold the asset to collect the contractual cash flows and the
contractual terms give rise on specified dates to cash flows that
are solely payments of principal and interest.
2 For equity investments not held for trading, the
Company may make an irrevocable election at initial recognition to
recognize changes in fair value through OCI rather than profit or
loss. The Company made this election for its investments in ICL,
Sinofert and certain equity investments as the investments are held
for strategic purposes.
Accounting Policies Accounting Estimates and Judgments
Financial instruments are recognized at trade date when the Company
commits to purchase or sell the asset. Financial assets are
derecognized when the rights to receive cash flows from the
investments have expired or the Company has transferred them, and
all the risks and rewards of ownership have been substantially
transferred.
Derivatives are used to lock in commodity prices and exchange
rates. For designated and qualified cash flow hedges:
• the effective portion of the change in the
fair value of the derivative is accumulated in OCI;
• when the hedged forecast transaction occurs,
the related gain or loss is removed from AOCI and included in the
cost of inventory;
• the hedging gain or loss included in the cost
of inventory is recognized in earnings when the product containing
the hedged item is sold or becomes impaired; and
• the ineffective portions of hedges are
recorded in net earnings in the current period.
The Company also assesses whether the natural gas derivatives used
in hedging transactions are expected to be or were highly
effective, both at the hedge’s inception and on an ongoing
basis, in offsetting changes in fair values of hedged items. Hedge
effectiveness related to the Company’s New York Mercantile
Exchange (“NYMEX”) natural gas hedges is assessed on a
prospective and retrospective basis using regression analyses. The
Company’s Alberta Energy Company (“AECO”) natural
gas hedges are assessed using a qualitative assessment. Potential
sources of ineffectiveness are changes in timing of forecast
transactions, changes in volume delivered or changes in credit risk
of the Company or the counterparty.
Financial assets and financial liabilities are offset and the net
amount is presented in the consolidated balance sheets when the
Company:
• currently has a legally enforceable right to
offset the recognized amounts; and
• intends either to settle on a net basis, or to
realize the assets and settle the liabilities simultaneously.
See Note 32 for discussion related to the policies, estimates and
judgments for fair value measurements. |
| Trade Receivables | Accounting
Policies
Accounting
Estimates and Judgments
Trade accounts receivable are recognized initially at fair value
and subsequently measured at amortized cost less provision for
impairment of trade accounts receivable. When a trade account
receivable is uncollectible, it is written off against the
provision. Subsequent recoveries of amounts previously written off
are credited to the consolidated statements of earnings.
Vendors may offer various incentives to purchase products for
resale. Vendor rebates and prepay discounts are accounted for as a
reduction of the prices of the suppliers’ products. Rebates
based on the amount of materials purchased reduce cost of goods
sold as inventory is sold. Rebates are offset based on sales
volumes to cost of goods sold if the rebate has been earned based
on sales volumes of products.
Rebates that are probable and can be reasonably estimated are
accrued. Rebates that are not probable or estimable are accrued
when certain milestones are achieved. Rebates not covered by
binding agreements or published vendor programs are accrued when
conclusive documentation of right of receipt is obtained.
Determining when amounts are deemed uncollectible requires
judgment.
Estimation of rebates can be complex in nature as vendor
arrangements are diverse. The amount of the accrual is determined
by analyzing and reviewing historical trends to apply negotiated
rates to estimated and actual purchase volumes. Estimated amounts
accrued throughout the year could also be impacted if actual
purchase volumes differ from projected volumes. |
| Summary of Inventories | Accounting Policies Accounting Estimates
and Judgments
Inventories are valued monthly at the lower of cost and net
realizable value. Costs are allocated to inventory using the
weighted average cost method and include: direct acquisition
costs, direct costs related to units of production and a systematic
allocation of fixed and variable production overhead, as
applicable.
Net realizable value is based on: Judgment is used to allocate production overhead
to inventories and to determine net realizable value, including the
appropriate measure and inputs of a combination of interrelated
demand and supply variables.
For products purchased for resale, finished
products, intermediate products and raw materials
For materials and supplies
• selling price of the finished product
(in ordinary course of business);
• less the estimated costs of completion;
and
• less the estimated costs to make
the sale.
• replacement cost.
A writedown is recognized if carrying amount exceeds net realizable
value and may be reversed if the circumstances which caused it no
longer exist. |
| Property, Plant and Equipment | Accounting Policies
Accounting Estimates and
Judgments
Property, plant and equipment (which include certain mine
development costs, pre-stripping
Cost includes all expenditures directly attributable to bringing
the asset to the location and installing it in working condition
for its intended use, including:
• additions to, and betterments and renewals of,
existing assets;
• borrowing costs incurred during construction
using a capitalization rate based on the weighted average interest
rate of the Company’s outstanding debt; and
• a reduction for income derived from the asset
during construction.
Each component of an item of property, plant and equipment with a
cost that is significant in relation to the item’s total cost
is depreciated separately. When the cost of replacing part of an
item of property, plant and equipment is capitalized, the carrying
amount of the replaced part is derecognized. The cost of major
inspections and overhauls is capitalized and depreciated over the
period until the next major inspection or overhaul. Maintenance and
repair expenditures that do not improve or extend productive life
are expensed in the period incurred.
Environmental costs related to current operations are also
capitalized if:
• property life is extended;
• capacity is increased;
• contamination from future operations is
mitigated or prevented; or
• related to legal or constructive asset
retirement obligations.
Judgment involves determining:
• costs, including income or expenses derived
from an asset under construction, that are eligible for
capitalization;
• timing to cease cost capitalization, generally
when the asset is capable of operating in the manner intended by
management, but also considering the circumstances and the industry
in which the asset is to be operated, normally predetermined by
management with reference to such factors as productive
capacity;
• the appropriate level of componentization (for
individual components for which different depreciation methods or
rates are appropriate);
• repairs and maintenance that qualify as major
inspections and overhauls; and
• useful life over which such costs should be
depreciated.
Certain property, plant and equipment directly related to the
Potash, Nitrogen, and Phosphate and Sulfate segments are
depreciated using the units-of-production Pre-stripping units-of-production
The following estimated useful lives have been applied to the
majority of property, plant and equipment assets as at
December 31, 2018:
Useful Life Range (years)
Weighted Average Useful Life (years) 1
Land improvements 5 to 80 35
Buildings and improvements 2 to 60 38
Machinery and equipment
1 to 80
25
1 Weighted by carrying amount as at December 31,
2018.
Estimated useful lives, expected patterns of consumption,
depreciation method and residual values are reviewed at least
annually with the effect of any changes in estimate being accounted
for on a prospective basis.
Uncertainties are inherent in estimating reserve quantities,
particularly as they relate to assumptions regarding future prices,
the geology of the Company’s mines, the mining methods used,
and the related costs incurred to develop and mine its reserves.
Changes in these assumptions could result in material
adjustments to reserve estimates, which could result
in impairments or changes to depreciation expense in future
periods. |
| Goodwill and Other Intangible Assets | Accounting
Policies
Accounting
Estimates and Judgments
Goodwill is carried at cost, is not amortized, and represents the
excess of the cost of an acquisition over the fair value of the
Company’s share of the net identifiable assets of the
acquired subsidiary at the date of acquisition.
An intangible asset is recognized when it is:
• reliably measurable;
• identifiable (separable or arises from
contractual rights);
• probable that expected future economic
benefits will flow to the Company; and
• controllable by the Company.
Amortization is recognized in net earnings as an expense related to
the function of the intangible asset.
The following expenses are not recognized as an asset:
• costs to maintain software programs; and
• development costs that do not meet the
capitalization criteria.
Goodwill is allocated to CGUs or groups of CGUs for impairment
testing based on the level at which it is monitored by management,
and not at a level higher than an operating segment. The allocation
is made to those CGUs or groups of CGUs expected to benefit from
the business combination in which the goodwill arose.
Judgment is applied in determining when expenditures are eligible
for capitalization as intangible assets.
Estimation is applied to determine expected useful lives used in
the straight-line amortization of intangible assets with
finite lives.
The following estimated useful lives have been applied to
finite-lived intangible assets as at December 31, 2018.
Useful Life Range
Customer relationships 6 to 15
Technology 3 to 7
Trade names 1 10 to 20
Other 1 to 30
1
Certain trade names have indefinite useful lives as
there are no regulatory, legal, contractual, cooperative, economic
or other factors that limit their useful lives.
Useful lives are reviewed, and adjusted if appropriate, at least
annually. |
| Asset Retirement Obligations and Accrued Environmental Costs | Accounting Policies Accounting Estimates and Judgments
Provisions are:
• recognized for present legal or constructive
obligations arising from past events where a future outflow of
resources is probable, provided that amount can be reliably
estimated;
• measured at the present value of the cash flow
expected to be required to settle the obligation; and
• reviewed at the end of each reporting period
for any changes, including the discount rate, foreign exchange rate
and amount or timing of the underlying cash flows, and adjusted
against the carrying amount of the provision and any related asset;
otherwise, it is recognized in net earnings.
A gain or loss may be incurred upon settlement of the
liability.
As a result of the Merger, the Company recognized contingent
liabilities, which represents additional environmental costs that
are present obligations of the Company although cash outflows of
resources are not probable. These contingent liabilities are
subsequently measured at the higher of the amount initially
recognized and the best estimate of the expenditures to be
incurred.
Asset retirement obligations and accrued environmental costs
include:
• reclamation and restoration costs at the
Company’s potash and phosphate mining operations, including
management of materials generated by mining and mineral processing,
such as various mine tailings and gypsum;
• land reclamation and revegetation
programs;
• decommissioning of underground
and surface operating facilities;
• general cleanup activities aimed at returning
the areas to an environmentally acceptable condition; and
• post-closure
care and maintenance.
Estimates for provisions take into account:
• most provisions will not be settled for a
number of years;
• environmental laws and regulations and
interpretations by regulatory authorities could change or
circumstances affecting the Company’s operations could
change, either of which could result in significant changes to
current plans; and
• the nature, extent and timing of current and
proposed reclamation and closure techniques in view of present
environmental laws and regulations.
It is reasonably possible that the ultimate costs could change in
the future and that changes to these estimates could have a
material effect on the Company’s financial statements.
The Company uses appropriate technical resources, including outside
consultants, to develop specific site closure and post-closure
plans in accordance with the requirements of the various
jurisdictions in which it operates. Other than certain land
reclamation programs, settlement of the obligations is typically
correlated with mine life estimates. |
| Investments in Equity-Accounted Investees | Accounting
Policies Accounting Estimates and Judgments
Investments in Equity-Accounted
Investees
Investments in which the Company exercises significant influence
(but does not control) or has joint control (as joint ventures) are
accounted for using the equity method. Significant influence is the
power to participate in the financial and operating policy
decisions of the investee, commonly referred to as associates.
The Company’s significant policies include:
Investments in Equity-Accounted Investees
and Investments at FVTOCI
Judgment is necessary in determining:
• when significant influence exists;
and
• if objective evidence of impairment exists for
equity-accounted investees and, if so, the amount of
impairment.
Significant
Policy
Statement of Comprehensive Income Investment
Proportionate share of net earnings (loss)
adjusted for any fair value adjustments at acquisition date and
differences in accounting policies
Net earnings (loss)
Increase (decrease)
Gain (loss) on disposal
Net earnings (loss)
Increase (decrease)
Proportionate share of post-acquisitions movements
in OCI (loss)
OCI (loss)
Increase (decrease)
Impairment (loss)
reversal 1
Net earnings (loss)
Increase (decrease)
Dividends received
–
(Decrease)
1 An impairment test is performed when there is
objective evidence of impairment, such as significant adverse
changes in the environment in which the equity-accounted investee
operates or a significant or prolonged decline in the fair value of
the investment below its carrying amount.
Investments at FVTOCI
The fair value of investments designated as FVTOCI is recorded in
the consolidated balance sheets, with unrealized gains and losses,
net of related income taxes, recorded in AOCI.
The Company’s significant policies include:
• the cost of investments sold is based on the
weighted average method; and
• realized gains and losses on these investments
remain in OCI, but the cumulative balance can be transferred to
another equity reserve, such as retained earnings. |
| Investments of FVTOCI | Investments at FVTOCI
The fair value of investments designated as FVTOCI is recorded in
the consolidated balance sheets, with unrealized gains and losses,
net of related income taxes, recorded in AOCI.
The Company’s significant policies include:
• the cost of investments sold is based on the
weighted average method; and
• realized gains and losses on these investments
remain in OCI, but the cumulative balance can be transferred to
another equity reserve, such as retained earnings. |
| Long-Term Debt | Accounting Policy
Issue costs of long-term debt obligations are capitalized to
long-term obligations and are amortized to expense over the term of
the related liability using the effective interest method. |
| Commitments | Accounting Policies Accounting Estimates and Judgments
Leases entered into are classified as either finance or operating
leases. Leases that transfer substantially all of the risks and
rewards of ownership of property to the Company are accounted for
as finance leases. They are capitalized at the commencement of the
lease at the lower of the fair value of the leased property and the
present value of the minimum lease payments. Property acquired
under a finance lease is depreciated over the shorter of the
period of expected use on the same basis as other similar
property, plant and equipment and the lease term.
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as
operating leases. Rental payments under operating leases are
expensed in net earnings on a straight-line basis over the period
of the lease.
Refer to Note 32 for details pertaining to the impact of the
adoption of IFRS 16 in 2019.
Judgment is required in considering a number of factors to ensure
that leases to which the Company is party are classified
appropriately as operating or financing. Such factors include
whether the lease term is for the major part of the asset’s
economic life and whether the present value of minimum lease
payments amounts to substantially all of the fair value of the
leased asset.
As at December 31, 2018, substantially all of the leases to
which the Company is party have been classified as operating
leases. |
| Guarantees | Accounting Policies
Guarantees are not recognized in the consolidated balance sheets,
but are disclosed and include contracts or indemnifications that
contingently require the Company to make payments to the guaranteed
party based on:
• changes in an underlying;
• another entity’s failure to
perform under an agreement; and
• failure of a third party to pay its
indebtedness when due.
Guarantees are recorded by the Company and recognized as a
financial instrument in the consolidated balance sheets when any of
the triggering events above result in the Company becoming
primarily liable to the contract. |
| Pension and Other Post-Retirement Benefits | Accounting
Policies Accounting Estimates and Judgments
For employee retirement and other defined benefit plans:
• accrued liabilities are recorded net of plan
assets;
• costs including current and past service
costs, gains or losses on curtailments and settlements, and
remeasurements are actuarially determined on a regular basis using
the projected unit credit method; and
• past service cost is recognized in net
earnings at the earlier of when i) a plan amendment or curtailment
occurs; or ii) related restructuring costs or termination
benefits are recognized.
Remeasurements, recognized directly in OCI in the period they
occur, are comprised of actuarial gains and losses, return on plan
assets (excluding amounts included in net interest) and the effect
of the asset ceiling (if applicable).
When a plan amendment occurs before a settlement, the Company
recognizes past service cost before any gain or loss on
settlement.
Defined contribution plan costs are recognized in net earnings for
services rendered by employees during the period.
Estimates and judgments are required to determine discount rates,
health care cost trend rates, projected salary increases,
retirement age, longevity and termination rates. These assumptions
are determined by management and are reviewed annually by the
Company’s independent actuaries.
The Company’s discount rate assumption is impacted by:
• the weighted average interest rate at
which each pension and other post-retirement plan liability could
be effectively settled at the measurement date;
• country specific rates; and
• the use of a yield curve approach. 1
1 Based on the respective plans’
demographics, expected future pension benefits and medical claims,
payments are measured and discounted to determine the present value
of the expected future cash flows. The cash flows are discounted
using yields on high-quality AA-rated non-callable |
| Share-Based Compensation | Accounting Policies Accounting Estimates and Judgments
The accounting for share-based compensation plans is fair
value-based.
The grant date is the date the Company and the employee have a
shared understanding of the terms and conditions of the
arrangement, at which time the Company confers on the employee the
right to cash equity instruments, provided the specified vesting
conditions, if any, are met.
For those awards with performance conditions that determine the
number of options or units to which employees will be
entitled, measurement of compensation cost is based on the
Company’s best estimate of the outcome of the
performance conditions.
For plans settled through the issuance of equity:
• fair value for stock options is determined on
grant date using the Black-Scholes-Merton
option-pricing model;
• fair value for PSUs is determined on grant
date by projecting the outcome of performance conditions;
• compensation expense is recorded over the
period the plans vest (corresponding increase to contributed
surplus);
• forfeitures are estimated throughout the
vesting period based on past experience and future expectations,
and adjusted upon actual vesting; and
• when exercised, the proceeds and amounts
recorded in contributed surplus are recorded in share capital.
For plans settled in cash:
• a liability is recorded based on the fair
value of the awards each period;
• expense accrues from the grant date over the
vesting period; and
• fluctuations in fair value of the award and
related compensation expense are recognized in the period
the fluctuation occurs.
Judgment involves determining:
• the grant date; and
• the fair value of share-based compensation
awards at the grant date.
Estimation involves determining:
• stock option-pricing model assumptions as
described in the weighted average assumptions table below;
• forfeiture rate for options granted;
• projected outcome of performance conditions
for PSUs, including the relative ranking of the
Company’s total shareholder return, including expected
dividends, compared with a specified peer group using a Monte Carlo
simulation option-pricing model and the outcome of the
Company’s synergies relative to the target; and
• the number of dividend equivalent units
expected to be earned.
PSUs vest based on the achievement of performance conditions over a
three-year performance cycle. Changes to vesting assumptions may
change based on non-market
RSUs are not subject to performance conditions and vest at the end
of the three-year vesting period.
Changes to vesting assumptions are reflected in earnings
immediately for compensation cost already recognized. |
| Related Party Transactions | Accounting
Policies
A person or entity is considered a related party if it is:
• an associate or joint venture of Nutrien;
• a member of key management personnel,
consisting of the Company’s directors and executives as
disclosed in the Company’s 2018 Annual Information Form;
• a post-employment benefit plan for the benefit
of Nutrien employees; or
• a person that has significant influence over
Nutrien. |
| Contingencies | Accounting
Policies
Accounting
Estimates and Judgments
Generally, a contingent liability arises from past events and
is:
• a possible obligation whose existence will be
confirmed only by one or more uncertain future events or
non-events
• a present obligation not recognized because it
is not probable an outflow of resources will be required to settle
the obligation, or a reliable estimate of the amount cannot be
made.
Contingent liabilities are not recognized in the financial
statements but are disclosed unless the possibility of an outflow
of resources embodying economic benefits is remote. Where the
Company is jointly and severally liable for an obligation, the part
of the obligation that is expected to be met by other parties is
treated as a contingent liability.
The following judgments are required to determine the
Company’s exposure to possible losses and gains related to
environmental matters and other various claims and lawsuits
pending:
• prediction of the outcome of uncertain
events (i.e., being virtually certain, probable, remote or
undeterminable);
• determination of whether recognition or
disclosure in the consolidated financial statements is required;
and
• estimation of potential financial effects.
Where no amounts are recognized, such amounts are contingent and
disclosure may be appropriate. While the amount disclosed in the
consolidated financial statements may not be material, the
potential for large liabilities exists and, therefore, these
estimates could have a material impact on the Company’s
consolidated financial statements. |
| Principles of Consolidation | Topic Accounting
Policies Accounting Estimates and Judgments
Principles of
Consolidation
These consolidated financial statements include the accounts of the
Company and entities controlled by it (its subsidiaries). Control
is achieved by having each of:
• power over the investee to direct the
relevant activities of the investee;
• exposure, or rights, to variable returns from
involvement with the investee; and
• the ability for the Company to use its power
over the investee to affect the amount of the Company’s
returns.
Judgment involves:
• assessing control, including if the Company
has the power to direct the relevant activities of the investee;
and
• determining the relevant activities and which
party controls them.
The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assessing
whether the Company controls another entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Company. They are deconsolidated from the
date that control ceases.
Consideration is given to:
• voting rights;
• the relative size and dispersion of the voting
rights held by other shareholders;
• the extent of participation by those
shareholders in appointing key management personnel or board
members;
• the right to direct the investee to enter
into transactions for the Company’s benefit; and
• the exposure, or rights, to variability of
returns from the Company’s involvement with the investee.
Principal (wholly owned)
Operating Subsidiaries: Location Principal
Activity
• Potash Corporation of Saskatchewan, Inc. Canada Mining and/or
processing of crop nutrient products and corporate
functions
• Agrium, Inc. Canada Manufacturer and distributor of crop nutrients and
corporate functions
• Agrium Canada Partnership Canada Manufacturer and distributor of crop
nutrients
• Agrium Potash Ltd. Canada Manufacturer and distributor of crop
nutrients
• Agrium U.S. Inc. United States Manufacturer and distributor of crop
nutrients
• Nutrien Ag Solutions Argentina S.A.
(Argentina) Argentina Crop input retailer
• Cominco Fertilizer Partnership United States Manufacturer and distributor of crop
nutrients
• Nutrien Ag Solutions, Inc. United States Crop input retailer
• Nutrien Ag Solutions (Canada) Inc. Canada Crop input retailer
• Landmark Operations Ltd. Australia Crop input retailer
• Loveland Products Inc. United States Crop input developer and retailer
• PCS Sales (Canada) Inc. Canada Marketing and sales of the
Company’s products
• PCS Sales (USA), Inc. United States Marketing and sales of the Company’s
products
• PCS Phosphate Company, Inc.
– PCS Purified Phosphates United States Mining and/or processing of phosphate products in
the states of North Carolina, Illinois, Missouri and Nebraska |
| Long-Lived Asset Impairment | Long-Lived Asset
Impairment
At the end of each reporting period, the Company reviews conditions
to determine whether there is any indication that an
impairment exists that could potentially impact the carrying
amounts of both its long-lived assets to be held and used and its
identifiable intangible assets with finite lives. When such
indicators exist, impairment testing is performed. Regardless,
goodwill is tested at least annually (in the fourth quarter).
To assess impairment, assets are grouped at the smallest levels for
which there are separately identifiable cash inflows that are
largely independent of the cash inflows from other assets
or groups of assets (this can be at the asset or CGU level).
Where impairment indicators exist for the asset or CGU:
• the recoverable amount is estimated (the
higher of FVLCD and value in use);
• to assess value in use, the estimated future
cash flows are discounted to their present value (using
a pre-tax
• the impairment loss is the amount by which the
carrying amount exceeds its recoverable amount; and
• the impairment loss is allocated first to
reduce the carrying amount of any related goodwill and then
pro rata to each asset in the unit (on the basis of the
carrying amount).
Non-financial
Judgment involves:
• identifying the appropriate asset or CGU;
• determining the appropriate discount rate for
assessing value in use; and
• making assumptions about future sales, margins
and market conditions over the long-term life of the assets
or CGUs.
The Company cannot predict if an event that triggers impairment
will occur, when it will occur or how it will affect reported
asset amounts. Asset impairment amounts previously recorded could
be affected if different assumptions were used or if market and
other conditions change. Such changes could result
in non-cash
Impairments were recognized during 2018 and 2017 as shown in Note
16. |
| Fair Value Measurements | Topic Accounting
Policies Accounting Estimates and Judgments
Fair Value
Measurements
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether
that price is directly observable or estimated using another
valuation technique.
Fair value measurements are categorized into levels based on the
degree to which inputs are observable and their significance:
Fair value estimates:
• are at a point-in-time
• can be determined using multiple methods,
which can cause values (or a range of reasonable values) to differ;
and
• may require assumptions about costs/prices
over time, discount and inflation rates, defaults and
other relevant variables.
Determination of the level hierarchy is based on the
Company’s assessment of the lowest level input that is
significant to the fair value measurement and is subject to
estimation and judgment.
Level 1 Level 2 Level 3
Unadjusted quoted prices (in active markets
accessible at the measurement date for identical assets or
liabilities). Quoted prices (in markets that are not active or
based on inputs that are observable for substantially the full term
of the asset or liability). Prices or valuation techniques that require inputs
that are both unobservable and significant to the overall
measurement. |
| Restructuring Charges | Restructuring
Charges
Plant shutdowns, sales of business units or other corporate
restructurings may trigger restructuring costs. Incremental costs
for employee termination, contract termination and other exit costs
are recognized as a liability and an expense when:
• a detailed formal plan for restructuring has
been demonstrably committed to;
• withdrawal is without realistic possibility;
and
• a reliable estimate can be made.
Restructuring activities are complex, can take several months to
complete and usually involve reassessing estimates throughout
the process. |
| Foreign Currency Transactions | Foreign Currency
Transactions
Items included in the consolidated financial statements of the
Company and each of its subsidiaries are measured using the
currency of the primary economic environment in which the
individual entity operates (“the functional
currency”).
Foreign exchange gains and losses resulting from the settlement of
foreign currency transactions, and from the translation
at period-end
Translation differences from non-monetary non-monetary Non-monetary The consolidated financial statements
are presented in US dollars, which was determined to
be the functional currency of the Company and the
majority of its subsidiaries. |
