Exhibit 99.1

 

 

TELUS CORPORATION

 

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

(UNAUDITED)

 

MARCH 31, 2020

 

 

condensed interim consolidated statements of income and other comprehensive income

(unaudited)

 

				Three months
Periods ended March 31 (millions except per share amounts)		Note		2020			2019
OPERATING REVENUES
Service				$	3,245		$	3,020
Equipment				418			469
Revenues arising from contracts with customers		6		3,663			3,489
Other operating income		7		31			17
				3,694			3,506
OPERATING EXPENSES
Goods and services purchased				1,412			1,421
Employee benefits expense		8		873			706
Depreciation		17		523			470
Amortization of intangible assets		18		202			147
				3,010			2,744
OPERATING INCOME				684			762
Financing costs		9		192			168
INCOME BEFORE INCOME TAXES				492			594
Income taxes		10		139			157
NET INCOME				353			437
OTHER COMPREHENSIVE INCOME		11
Items that may subsequently be reclassified to income
Change in unrealized fair value of derivatives designated as cash flow hedges				222			(49		)
Foreign currency translation adjustment arising from translating financial statements of foreign operations				52			6
				274			(43		)
Items never subsequently reclassified to income
Change in measurement of investment financial assets				—			—
Employee defined benefit plan re-measurements				316			24
				316			24
				590			(19		)
COMPREHENSIVE INCOME				$	943		$	418
NET INCOME ATTRIBUTABLE TO:
Common Shares				$	350		$	428
Non-controlling interests				3			9
				$	353		$	437
COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Common Shares				$	928		$	406
Non-controlling interests				15			12
				$	943		$	418
NET INCOME PER COMMON SHARE*		12
Basic				$	0.28		$	0.36
Diluted				$	0.28		$	0.36
TOTAL WEIGHTED AVERAGE COMMON SHARES OUTSTANDING*
Basic				1,248			1,201
Diluted				1,252			1,201

 

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* Amounts reflect retrospective application of March 17, 2020, share split (see Note 28(b)).

 

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

 

2

 

condensed interim consolidated statements of financial position

(unaudited)

 

As at (millions)		Note		March 31, 2020			December 31, 2019
ASSETS
Current assets
Cash and temporary investments, net				$	1,058		$	535
Accounts receivable		6(b)		2,002			1,962
Income and other taxes receivable				32			127
Inventories		1(c)		368			437
Contract assets		6(c)		652			737
Prepaid expenses		20		596			547
Current derivative assets		4(d)		60			8
				4,768			4,353
Non-current assets
Property, plant and equipment, net		17		14,384			14,232
Intangible assets, net		18		13,461			12,812
Goodwill, net		18		6,289			5,331
Contract assets		6(c)		263			328
Other long-term assets		20		1,903			919
				36,300			33,622
				$	41,068		$	37,975
LIABILITIES AND OWNERS’ EQUITY
Current liabilities
Short-term borrowings		22		$	100		$	100
Accounts payable and accrued liabilities		23		2,558			2,749
Income and other taxes payable				102			55
Dividends payable		13		371			352
Advance billings and customer deposits		24		695			675
Provisions		25		243			288
Current maturities of long-term debt		26		1,224			1,332
Current derivative liabilities		4(d)		6			23
				5,299			5,574
Non-current liabilities
Provisions		25		599			590
Long-term debt		26		17,884			17,142
Other long-term liabilities		27		715			806
Deferred income taxes				3,529			3,204
				22,727			21,742
Liabilities				28,026			27,316
Owners’ equity
Common equity		28		12,768			10,548
Non-controlling interests				274			111
				13,042			10,659
				$	41,068		$	37,975
Contingent Liabilities		29

 

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

 

3

 

condensed interim consolidated statements of changes in owners’ equity

(unaudited)

 

				Common equity
				Equity contributed											Accumulated
				Common Shares (Note 28)											other						Non-
(millions)		Note		Number of shares*		Share capital			Contributed surplus			Retained earnings			comprehensive income			Total			controlling interests			Total
Balance as at January 1, 2019				1,197		$	5,390		$	383		$	4,321		$	11		$	10,105		$	74		$	10,179
Net income				—		—			—			428			—			428			9			437
Other comprehensive income		11		—		—			—			24			(46		)	(22		)	3			(19		)
Dividends		13		—		—			—			(329		)	—			(329		)	—			(329		)
Dividends reinvested and optional cash payments		13(b), 14(c)		1		24			—			—			—			24			—			24
Issue of Common Shares in business combination				4		72			—			—			—			72			—			72
Balance as at March 31, 2019				1,202		$	5,486		$	383		$	4,444		$	(35	)	$	10,278		$	86		$	10,364
Balance as at January 1, 2020				1,209		$	5,660		$	398		$	4,371		$	119		$	10,548		$	111		$	10,659
Net income				—		—			—			350			—			350			3			353
Other comprehensive income		11		—		—			—			316			262			578			12			590
Dividends		13		—		—			—			(371		)	—			(371		)	—			(371		)
Dividends reinvested and optional cash payments		13(b), 14(c)		5		131			—			—			—			131			—			131
Equity accounted share-based compensation		14(b)		—		—			18			—			—			18			—			18
Common Shares issued		28(a)		58		1,453			—			—			—			1,453			—			1,453
Change of ownership interests of subsidiary		28(d)		—		—			61			—			—			61			148			209
Balance as at March 31, 2020				1,272		$	7,244		$	477		$	4,666		$	381		$	12,768		$	274		$	13,042

 

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* Amounts reflect retrospective application of March 17, 2020, share split (see Note 28(b)).

 

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

 

4

 

condensed interim consolidated statements of cash flows

(unaudited)

 

				Three months
Periods ended March 31 (millions)		Note		2020			2019
OPERATING ACTIVITIES
Net income				$	353		$	437
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization				725			617
Deferred income taxes		10		(61		)	31
Share-based compensation expense, net		14(a)		23			19
Net employee defined benefit plans expense		15(a)		27			20
Employer contributions to employee defined benefit plans				(15		)	(16		)
Non-current contract assets				65			21
Non-current unbilled customer finance receivables		20		(41		)	6
Loss from equity accounted investments		7, 21		8			—
Other				33			73
Net change in non-cash operating working capital		31(a)		60			(418		)
Cash provided by operating activities				1,177			790
INVESTING ACTIVITIES
Cash payments for capital assets, excluding spectrum licences		31(a)		(780		)	(793		)
Cash payments for acquisitions, net		18(b)		(1,104		)	(162		)
Advances to, and investment in, real estate joint ventures and associate		21		(80		)	(8		)
Real estate joint venture receipts		21		2			1
Other				3			—
Cash used by investing activities				(1,959		)	(962		)
FINANCING ACTIVITIES		31(b)
Common Shares issued				1,495			—
Dividends paid to holders of Common Shares		13(a)		(222		)	(303		)
Issue (repayment) of short-term borrowings, net				—			400
Long-term debt issued		26		1,377			1,166
Redemptions and repayment of long-term debt		26		(1,488		)	(917		)
Shares of subsidiary issued to non-controlling interests		28(d)		209			—
Other				(66		)	—
Cash provided by financing activities				1,305			346
CASH POSITION
Increase in cash and temporary investments, net				523			174
Cash and temporary investments, net, beginning of period				535			414
Cash and temporary investments, net, end of period				$	1,058		$	588
SUPPLEMENTAL DISCLOSURE OF OPERATING CASH FLOWS
Interest paid				$	(177	)	$	(179	)
Interest received				$	3		$	2
Income taxes paid, net
In respect of comprehensive income				$	(93	)	$	(336	)
In respect of business acquisitions				(31		)	(15		)
				$	(124	)	$	(351	)

 

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

 

5

 

notes to condensed interim consolidated financial statements

(unaudited)

 

MARCH 31, 2020

 

TELUS Corporation is one of Canada’s largest telecommunications companies, providing a wide range of telecommunications services and products, including wireless and wireline voice and data. Data services include: internet protocol; television; hosting, managed information technology and cloud-based services; healthcare solutions; customer care and business services; and home and business smart technology (including security).

 

TELUS Corporation was incorporated under the Company Act (British Columbia) on October 26, 1998, under the name BCT.TELUS Communications Inc. (BCT). On January 31, 1999, pursuant to a court-approved plan of arrangement under the Canada Business Corporations Act among BCT, BC TELECOM Inc. and the former Alberta-based TELUS Corporation (TC), BCT acquired all of the shares of BC TELECOM Inc. and TC in exchange for Common Shares and Non-Voting Shares of BCT, and BC TELECOM Inc. was dissolved. On May 3, 2000, BCT changed its name to TELUS Corporation and in February 2005, TELUS Corporation transitioned under the Business Corporations Act (British Columbia), successor to the Company Act (British Columbia). TELUS Corporation maintains its registered office at Floor 7, 510 West Georgia Street, Vancouver, British Columbia, V6B 0M3.

 

The terms “TELUS”, “we”, “us”, “our” or “ourselves” are used to refer to TELUS Corporation and, where the context of the narrative permits or requires, its subsidiaries.

 

Notes to condensed interim consolidated financial statements			Page
General application
1.	Condensed interim consolidated financial statements		7
2.	Accounting policy developments		7
3.	Capital structure financial policies		7
4.	Financial instruments		10
Consolidated results of operations focused
5.	Segment information		16
6.	Revenue from contracts with customers		17
7.	Other operating income		18
8.	Employee benefits expense		18
9.	Financing costs		19
10.	Income taxes		19
11.	Other comprehensive income		20
12.	Per share amounts		21
13.	Dividends per share		21
14.	Share-based compensation		21
15.	Employee future benefits		24
16.	Restructuring and other costs		24
Consolidated financial position focused
17.	Property, plant and equipment		26
18.	Intangible assets and goodwill		27
19.	Leases		29
20.	Other long-term assets		29
21.	Real estate joint ventures and investment in associate		30
22.	Short-term borrowings		32
23.	Accounts payable and accrued liabilities		32
24.	Advance billings and customer deposits		32
25.	Provisions		33
26.	Long-term debt		34
27.	Other long-term liabilities		37
28.	Owners’ equity		37
29.	Contingent liabilities		38
Other
30.	Related party transactions		40
31.	Additional statement of cash flow information		41

 

 

6

 

notes to condensed interim consolidated financial statements

(unaudited)

 

1                 condensed interim consolidated financial statements

 

(a)         Basis of presentation

 

The notes presented in our condensed interim consolidated financial statements include only significant events and transactions and are not fully inclusive of all matters normally disclosed in our annual audited financial statements; thus, our interim consolidated financial statements are referred to as condensed. Our condensed interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2019.

 

Our condensed interim consolidated financial statements are expressed in Canadian dollars and follow the same accounting policies and methods of their application as set out in our consolidated financial statements for the year ended December 31, 2019. The generally accepted accounting principles that we use are International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS-IASB) and Canadian generally accepted accounting principles. Our condensed interim consolidated financial statements comply with International Accounting Standard 34, Interim Financial Reporting and reflect all adjustments (which are of a normal recurring nature) that are, in our opinion, necessary for a fair statement of the results for the interim periods presented.

 

These consolidated financial statements for the three-month period ended March 31, 2020, were authorized by our Board of Directors for issue on May 7, 2020.

 

(b)         Use of estimates and judgments

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates (including about the future effects of the COVID-19 pandemic), assumptions and judgments that affect: the reported amounts of assets and liabilities at the date of the financial statements; the disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

(c)          Inventories

 

Our inventories primarily consist of wireless handsets, parts and accessories totalling $308 million at March 31, 2020 (December 31, 2019 — $375 million) and communications equipment held for resale. Costs of goods sold for the three-month period ended March 31, 2020, totalled $402 million (2019 — $459 million).

 

2                 accounting policy developments

 

Initial application of standards, interpretations and amendments to standards and interpretations in the reporting period

 

In October 2018, the International Accounting Standards Board amended IFRS 3, Business Combinations, seeking to clarify whether an acquisition transaction results in the acquisition of an asset or the acquisition of a business. The amendments are effective for acquisition transactions on or after January 1, 2020, although earlier application was permitted. The amended standard has a narrower definition of a business, which could result in the recognition of fewer business combinations than under the previous standard; the implication of this is that amounts which may have been recognized as goodwill in a business combination under the previous standard may now be recognized as allocations to net identifiable assets acquired under the amended standard (with an associated effect in an entity’s results of operations that would differ from the effect of goodwill having been recognized). We have applied the standard prospectively from January 1, 2020. The effects of the amended standard on our financial performance and disclosure will be dependent on the facts and circumstances of any future acquisition transactions and have not been material in the current fiscal year.

 

3                 capital structure financial policies

 

General

 

Our objective when managing capital is to maintain a flexible capital structure that optimizes the cost and availability of capital at acceptable risk.

 

In the management of capital and in its definition, we include common equity (excluding accumulated other comprehensive income), long-term debt (including long-term credit facilities, commercial paper backstopped by long-term credit facilities and any hedging assets or liabilities associated with long-term debt items, net of amounts recognized in accumulated other comprehensive income), cash and temporary investments, and short-term borrowings arising from securitized trade receivables.

 

 

7

 

notes to condensed interim consolidated financial statements

(unaudited)

 

We manage our capital structure and make adjustments to it in light of changes in economic conditions and the risk characteristics of our business. In order to maintain or adjust our capital structure, we may adjust the amount of dividends paid to holders of Common Shares, purchase Common Shares for cancellation pursuant to normal course issuer bids, issue new shares, issue new debt, issue new debt to replace existing debt with different characteristics and/or increase or decrease the amount of trade receivables sold to an arm’s-length securitization trust.

 

During 2020, our financial objectives, which are reviewed annually, were unchanged from 2019, excepting for a change in methodology of our dividend payout ratio. We believe that our financial objectives are supportive of our long-term strategy.

 

We monitor capital utilizing a number of measures, including: net debt to earnings before interest, income taxes, depreciation and amortization (EBITDA*) — excluding restructuring and other costs ratio; coverage ratios; and a dividend payout ratio.

 

Debt and coverage ratios

 

Net debt to EBITDA — excluding restructuring and other costs is calculated as net debt at the end of the period, divided by 12-month trailing EBITDA — excluding restructuring and other costs. This measure, historically, is substantially similar to the leverage ratio covenant in our credit facilities. Net debt and EBITDA — excluding restructuring and other costs are measures that do not have any standardized meanings prescribed by IFRS-IASB and are therefore unlikely to be comparable to similar measures presented by other companies. The calculation of these measures is set out in the following table. Net debt is one component of a ratio used to determine compliance with debt covenants.

 

As at, or for the 12-month periods ended, March 31 ($ in millions)		Objective		2020			2019
Components of debt and coverage ratios
Net debt 1				$	17,983		$	15,732
EBITDA — excluding restructuring and other costs 2				$	5,742		$	5,533
Net interest cost 3				$	783		$	660
Debt ratio
Net debt to EBITDA — excluding restructuring and other costs		2.20 – 2.70 4		3.13			2.84
Coverage ratios
Earnings coverage 5				3.8			4.3
EBITDA — excluding restructuring and other costs interest coverage 6				7.3			8.4

 

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(1)         Net debt is calculated as follows:

 

As at March 31		Note		2020			2019
Long-term debt		26		$	19,108		$	15,775
Debt issuance costs netted against long-term debt				93			90
Derivative (assets) liabilities, net				(655		)	41
Accumulated other comprehensive income amounts arising from financial instruments used to manage interest rate and currency risks associated with U.S. dollar-denominated long-term debt — excluding tax effects				395			(86		)
Cash and temporary investments, net				(1,058		)	(588		)
Short-term borrowings		22		100			500
Net debt				$	17,983		$	15,732

 

(2)         EBITDA — excluding restructuring and other costs is calculated as follows:

 

		EBITDA (Note 5)			Restructuring and other costs  (Note 16)			EBITDA – excluding restructuring and other costs
Add
Three-month period ended March 31, 2020		$	1,409		$	60		$	1,469
Year ended December 31, 2019		5,554			134			5,688
Deduct
Three-month period ended March 31, 2019		(1,379		)	(36		)	(1,415		)
EBITDA — excluding restructuring and other costs		$	5,584		$	158		$	5,742

 

(3)         Net interest cost is defined as financing costs, excluding employee defined benefit plans net interest, recoveries on long-term debt prepayment premium and repayment of debt, calculated on a 12-month trailing basis (expenses recorded for long-term debt prepayment premium, if any, are included in net interest cost).

(4)         Our long-term objective range for this ratio is 2.20 — 2.70 times. The ratio as at March 31, 2020, is outside the long-term objective range. We may permit, and have permitted, this ratio to go outside the objective range (for long-term investment opportunities), but we will endeavour to return this ratio to within the objective range in the medium term (following upcoming spectrum auctions), as we believe that this range is supportive of our long-term strategy. We are in

 

* EBITDA does not have any standardized meaning prescribed by IFRS-IASB and is therefore unlikely to be comparable to similar measures presented by other issuers; we define EBITDA as operating revenues less goods and services purchased and employee benefits expense. We have issued guidance on, and report, EBITDA because it is a key measure that management uses to evaluate the performance of our business, and it is also utilized in measuring compliance with certain debt covenants.

 

 

8

 

notes to condensed interim consolidated financial statements

(unaudited)

 

compliance with the leverage ratio covenant in our credit facilities, which states that we may not permit our net debt to operating cash flow ratio to exceed 4.00:1.00 (see Note 26(d)); the calculation of the debt ratio is substantially similar to the calculation of the leverage ratio covenant in our credit facilities.

(5)         Earnings coverage is defined as net income before borrowing costs and income tax expense, divided by borrowing costs (interest on long-term debt; interest on short-term borrowings and other; long-term debt prepayment premium), and adding back capitalized interest.

(6)         EBITDA — excluding restructuring and other costs interest coverage is defined as EBITDA — excluding restructuring and other costs, divided by net interest cost. This measure is substantially similar to the coverage ratio covenant in our credit facilities.

 

Net debt to EBITDA — excluding restructuring and other costs was 3.13 times as at March 31, 2020, up from 2.84 times one year earlier. The effect of the increase in net debt was exceeded by the effect of growth in EBITDA — excluding restructuring and other costs. The earnings coverage ratio for the twelve-month period ended March 31, 2020, was 3.8 times, down from 4.3 times one year earlier. Higher borrowing costs reduced the ratio by 0.6 and an increase in income before borrowing costs and income taxes increased the ratio by 0.1. The EBITDA — excluding restructuring and other costs interest coverage ratio for the twelve-month period ended March 31, 2020, was 7.3 times, down from 8.4 times one year earlier. Growth in EBITDA — excluding restructuring and other costs increased the ratio by 0.2, while an increase in net interest costs reduced the ratio by 1.3.

 

Dividend payout ratio

 

Commencing in 2020, so as to be consistent with the way we manage our business, we updated our revised dividend payout ratio presented to be a historical measure calculated as the sum of the last four quarters’ dividends declared for Common Shares as recorded in the financial statements, net of dividend reinvestment plan effects (see Note 13), divided by the sum of free cash flow* amounts for the most recent four quarters for interim reporting periods (divided by annual free cash flow if the reported amount is in respect of a fiscal year).

 

For the 12-month periods ended March 31		Objective		2020		2019
Determined using management measures
Dividend payout ratio — net of dividend reinvestment plan effects		60%–75% 1		76	%	130	%
Determined using most comparable IFRS-IASB measures
Ratio of dividends declared to cash provided by operating activities less capital expenditures (excluding spectrum licences)				101	%	117	%

 

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(1)         Our objective range for the dividend payout ratio is 60%-75% of free cash flow on a prospective basis. Dividends declared, net of dividend reinvestment plan effects are calculated as follows:

 

12-month periods ended March 31 (millions)		2020			2019
Dividends declared		$	1,400		$	1,283
Amount of dividends declared reinvested in Common Shares		(399		)	(89		)
Dividends declared, net of dividend reinvestment plan effects		$	1,001		$	1,194

 

Our calculation of free cash flow, and the reconciliation to cash provided by operating activities, is as follows:

 

12-month periods ended March 31 (millions)		Note		2020			2019
EBITDA		5		$	5,584		$	5,214
Deduct non-cash gains from sale of property, plant and equipment				(19		)	(46		)
Restructuring and other costs, net of disbursements				9			49
Effects of contract asset, acquisition and fulfilment and TELUS Easy Payment device financing				(44		)	(183		)
Effects of lease principal		31(b)		(329		)	(88		)
Leases accounted for as finance leases prior to adoption of IFRS 16				122			13
Deduct non-recurring gains and equity income related to real estate joint ventures		21(b)		—			(171		)
Donation to TELUS Friendly Future Foundation in Common Shares				—			100
Items from consolidated statements of cash flows:
Share-based compensation, net		14		2			17
Net employee defined benefit plans expense		15		85			90
Employer contributions to employee defined benefit plans				(40		)	(48		)
Interest paid				(712		)	(637		)
Interest received				8			9
Capital expenditures (excluding spectrum licences)		5		(2,925		)	(2,910		)
Income taxes paid, net of refunds				(417		)	(492		)
Free cash flow				1,324			917
Add (deduct):
Capital expenditures (excluding spectrum licences)		5		2,925			2,910
Adjustments to reconcile to Cash provided by operating activities				65			183
Cash provided by operating activities				$	4,314		$	4,010

 

* Free cash flow does not have any standardized meaning prescribed by IFRS-IASB and is therefore unlikely to be comparable to similar measures presented by other issuers; we define free cash flow as EBITDA (operating revenues less goods and services purchased and employee benefits expense) excluding certain working capital changes (such as trade receivables and trade payables), proceeds from divested assets and other sources and uses of cash, as found in the consolidated statements of cash flows. We have issued guidance on, and report, free cash flow because it is a key measure that management, and investors, use to evaluate the performance of our business.

 

 

9

 

notes to condensed interim consolidated financial statements

(unaudited)

 

4                 financial instruments

 

(a)         Credit risk

 

Excluding credit risk, if any, arising from currency swaps settled on a gross basis, the best representation of our maximum exposure (excluding income tax effects) to credit risk, which is a worst-case scenario and does not reflect results we expect, is set out in the following table:

 

As at (millions)		March 31, 2020			December 31, 2019
Cash and temporary investments, net		$	1,058		$	535
Accounts receivable		2,268			2,187
Contract assets		915			1,065
Derivative assets		684			84
		$	4,925		$	3,871

 

Cash and temporary investments, net

 

Credit risk associated with cash and temporary investments is managed by ensuring that these financial assets are placed with: governments; major financial institutions that have been accorded strong investment grade ratings by a primary rating agency; and/or other creditworthy counterparties. An ongoing review evaluates changes in the status of counterparties.

 

Accounts receivable

 

Credit risk associated with accounts receivable is inherently managed by the size and diversity of our large customer base, which includes substantially all consumer and business sectors in Canada. We follow a program of credit evaluations of customers and limit the amount of credit extended when deemed necessary. Accounts are considered to be past due (in default) when customers have failed to make the contractually required payments when due, which is generally within 30 days of the billing date. Any late payment charges are levied at an industry-based market or negotiated rate on outstanding non-current customer account balances.

 

As at (millions)				March 31, 2020									December 31, 2019
		Note		Gross			Allowance			Net 1			Gross			Allowance			Net 1
Customer accounts receivable, net of allowance for doubtful accounts
Less than 30 days past billing date				$	793		$	(8	)	$	785		$	803		$	(10	)	$	793
30-60 days past billing date				235			(8		)	227			331			(8		)	323
61-90 days past billing date				92			(7		)	85			74			(5		)	69
More than 90 days past billing date				89			(11		)	78			73			(14		)	59
Unbilled customer finance receivables				613			(22		)	591			523			(18		)	505
				$	1,822		$	(56	)	$	1,766		$	1,804		$	(55	)	$	1,749
Current				$	1,547		$	(47	)	$	1,500		$	1,570		$	(46	)	$	1,524
Non-current		20		275			(9		)	266			234			(9		)	225
				$	1,822		$	(56	)	$	1,766		$	1,804		$	(55	)	$	1,749

 

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(1)         Net amounts represent customer accounts receivable for which an allowance had not been made as at the dates of the Consolidated statements of financial position (see Note 6(b)).

 

We maintain allowances for lifetime expected credit losses related to doubtful accounts. Current economic conditions (including forward-looking macroeconomic data), historical information (including credit agency reports, if available), reasons for the accounts being past due and the line of business from which the customer accounts receivable arose are all considered when determining whether to make allowances for past-due accounts. The same factors are considered when determining whether to write off amounts charged to the allowance for doubtful accounts against the customer accounts receivable; amounts charged to the customer accounts receivable allowance for doubtful accounts that were written off but were still subject to enforcement activity as at March 31, 2020, totalled $603 million (December 31, 2019 — $449 million). The doubtful accounts expense is calculated on a specific-identification basis for customer accounts receivable above a specific balance threshold and on a statistically derived allowance basis for the remainder. No customer accounts receivable are written off directly to the doubtful accounts expense.

 

The following table presents a summary of the activity related to our allowance for doubtful accounts.

 

 

 

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