Virgin Mobile Canada was acquired by Bell Mobility for $142 Million. The amount represents 50% ownership. The acquisition was completed on July 2, 2009 along with a long-term licensing agreement with the Virgin Group, after fulfilling all regulatory, legal and other closing requirements. The consolidated statements of operations reflected in BCE Incorporated notes to financial statements include the results of acquired businesses from the date they were purchased. On July 2, 2009, Bell acquired the remaining 50% interest that that they did not already own in Virgin Mobile Canada, a mobile virtual network operator.
Also on July 1, 2009, they acquired substantially all of the assets of the national electronics retailer The Source. Goodwill reflected in the consolidated financial statements amounted to $115. The amount was deemed as immaterial. The company assesses goodwill for impairment for each of their reporting units in the fourth quarter of every year and when events or changes in circumstances indicate that goodwill might be impaired. The company prepares their consolidated financial statements according to Canadian Generally Accepted Accounting Principles (GAAP) and all amounts are in Canadian dollars unless otherwise indicated.
As required under Canadian GAAP, they make estimates when accounting for and reporting assets, liabilities, revenues and expenses, and they disclose contingent assets and liabilities in their financial statements. The company is also required to regularly evaluate the estimates that they make. BCE consolidates the financial statements of all of the companies they control. They proportionately consolidate their share of the financial statements of their joint venture interests. All transactions and balances between these companies have been eliminated on consolidation. With respect to the financial statements of BCE Inc.
and its consolidated subsidiaries the material differences between Canadian and United States GAAP are described and reconciled in the notes. Consolidation The financial statements of entities which are controlled by the Corporation are consolidated; entities which are jointly controlled by the Corporation, referred to as joint ventures, are accounted for using the proportionate consolidation method; associated companies, which the Corporation has the ability to significantly influence, are accounted for using the equity method; investments in other companies are accounted for using the cost method.
Goodwill and Intangible Assets The Canadian Accounting Standards Board (AcSB) issued section 3064, Goodwill and Intangible Assets, which establishes standards for the recognition, measurement, presentation and disclosure of intangible assets. Section 3064 came into effect on January 1, 2009, replacing section 3062, Goodwill and Other Intangible Assets and section 3450, Research and Development Costs. Adoption of this new standard did not have a significant impact on Bells financial results. International Financial Reporting Standards (IFRS)
The AcSB has set January 1, 2011 as the date that IFRS will replace Canadian GAAP for publicly accountable enterprises, which includes Canadian reporting issuers. The Company will prepare their financial statements in accordance with IFRS commencing January 1, 2011. Financial reporting under IFRS differs from Canadian GAAP in a number of respects, some of which are significant. IFRS on the date of adoption also is expected to differ from current IFRS due to new IFRS that are expected to be issued before the changeover date.
The company describes below their IFRS changeover plan, selected key activities and their status, and the significant known impacts on financial reporting. This information is provided to allow investors and others to obtain a better understanding of IFRS changeover plan and the resulting possible effects on the financial statements and operating performance measures. This information also reflects the most recent assumptions and expectations; circumstances may arise, such as changes in IFRS, regulations or economic conditions, which could change these assumptions or expectations.
IFRS Changeover Plan The company has developed a detailed plan for the changeover to IFRS comprised of three related phases: (Zeigler, 2010) • Review and Assessment – identify the required changes to the accounting policies and practices resulting from the changeover to IFRS to determine the scope of the work effort required for the Design and Implementation phases. • Design – design and development of detailed solutions to address the differences identified in the first phase of the changeover plan.
These solutions resulted in certain necessary changes to the internal business processes and financial systems to comply with IFRS accounting and disclosure requirements. • Implementation – implement the changes to affected accounting policies and practices, business processes, systems and internal controls. The acquisition of Virgin Mobile aligns perfectly with Bell’s strategic imperative to Accelerate Wireless, and they look forward to assisting Virgin Mobile in maximizing the network, product, global roaming and distribution advantages that come with being part of the broader Bell organization.
Thompson Iron Mines acquired Quinto Mining Consolidated Thompson has acquired all of the common shares of Quinto Mining. Quinto is now a wholly-owned subsidiary of Consolidated Thompson. Consolidated Thompson Iron Mines Limited (“Consolidated Thompson”) is a development stage company and has mineral exploration and development properties in Canada. Substantially all of the Company’s efforts are currently devoted to financing and developing its Bloom Lake iron ore property located near the city of Fermont, in the Province of Quebec, Canada.
In connection with the Acquisition, Quinto shareholders will receive one Consolidated Thompson common share and a cash payment of $0. 005 for every five Quinto common shares held. As a result of the Acquisition, Consolidated Thompson has acquired neighboring iron ore deposits, and significantly increased its mineral resources and exploration growth potential. This Acquisition further establishes Consolidated Thompson as a significant player in the Labrador Trough iron ore camp, while positioning itself well to participate in further consolidation in the iron ore industry.
As a result of the Acquisition, the combined company has: – An estimated measured and indicated mineral resource totaling 940 million tonnes grading 29. 33% Total Fe of which the measured resource totals 488. 5 million tonnes grading 29. 91% Total Fe and the indicated resource totals 451. 5 million tonnes grading 28. 71% Total Fe (NI 43-101 review carried out by Watts, Griffis and McOuat Limited); – Potential production growth through the integration of Peppler Lake and Lamelee deposits, both located within 60 km of the Bloom Lake deposit, which is currently being developed by Consolidated Thompson;
– Significant exploration potential at both Bloom Lake and the Lamelee and Peppler Lake deposits (exploration programs are in progress at the Bloom Lake, Peppler Lake and Lamelee projects); (Farlex, 2008) The arrangement was initially announced on April 21, 2008. Based on the latest information and estimates to complete the mine and mill construction, the revised costs are $545 million, which is within the range disclosed in the above-mentioned feasibility study prepared and filed in 2008. Accounting Policies The Company has adopted the disclosure requirements of CICA Section 1400, “General Standards of Financial Statement Presentation”.
The standard requires that management make an assessment of a company’s ability to continue as a going concern and to use the going concern basis in the preparation of the financial statements unless management intends to liquidate the Company or to cease trading, or has no realistic alternative but to do so. The audited consolidated financial statements and related notes of Consolidated Thompson have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). EIC-173, Credit risk and fair value of financial assets and financial liabilities
In January 2009, the CICA issued EIC-173, Credit risk and fair value of financial assets and financial liabilities, which clarifies that own credit risk and the credit risk of the counterparty should be taken into account in determining the fair value financial instruments, including derivative instruments. EIC-173 is to be applied retrospectively without restatement of prior periods to all financial assets and liabilities measured at fair value in interim and annual financial statements for periods ending on or after the date of issuance of this Abstract.
The adoption of this new standard did not have any significant impact on the consolidated financial statements disclosures or results of operations of the company. During 2009, Thompson recorded a net loss of $60,500,000 compared to $12,762,000 in 2008. The increase in the net loss in 2009 compared to 2008 was mainly the result of higher general and administrative expenses, start-up costs, a write-off of other assets and lower interest income. CONCLUSION
Comparing the two acquisitions made by each company to one another; the acquisition of Quinto has the most significant impact on the consolidated entity considering the size and the number of subsidiaries involved. If we compare it with Bell Company, the impact of Virgin Mobile is not that big in the consolidated financial statements. Both companies has provided better quality financial statement information regarding the acquisitions. In my opinion, the acquisition of Virgin by Bell is more likely to create value for the shareholders of the parent company. The possibility of earning a positive income is highly probable.
The business of mining and exploring for minerals on the other hand involves a high degree of risk and there can be no assurance that current exploration and development programs will result in profitable mining operations. References: BCE Incorporated. (2010). BCE Inc. 2009 Annual Report. Retrieved from http://prod05. bce. ca/annual_report/ Cian. (2009, July 3). Virgin Mobile sells its operation to Bell Canada. Gomo News . Farlex. (2008). Canada : Consolidated Thompson Iron Mines Completes Acquisition of Quinto Mining. The free library . Zeigler, C. (2010). Bell buys out remainder of Virgin Mobile Canada. engadgetsimobile .