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Note 8 Other income (expense)

Note 8 Other income (expense)

 

FOR THE YEAR ENDED DECEMBER 31

NOTE   2016   2015  

Net mark-to-market gains on derivatives used as economic hedges

    67 54

Gains on investments

3   58 72

Equity (losses) income from investments in associates and joint ventures

15          

Loss on investment

    (57 ) (54 )

Operations

    (32 ) 5

Losses on disposal/retirement of software, plant and equipment

    (28 ) (55 )

Early debt redemption costs

20   (11 ) (18 )

Impairment of assets

13, 14   (9 ) (49 )

Other

    33   33  

Total other income (expense)

    21 (12 )
 

Equity (losses) income from investments in associates and joint ventures

In 2016, we recorded a loss on investment of $46 million representing BCE’s share of the loss recorded by one of our equity investments on the sale of a portion of its operations. Additionally, we recorded a loss on investment of $11 million, representing equity losses on our share of an obligation to repurchase at fair value the minority interest in one of BCE’s joint ventures. The obligation is marked to market each reporting period and the gain or loss on investment is recorded as equity gains or losses from investments in associates and joint ventures.

In 2015, we recorded a loss on investment of $54 million, representing equity losses on our share of an obligation to repurchase at fair value the minority interest in one of BCE’s joint ventures.

 

 

Gains on investments

In 2016, BCE recorded gains on investments of $58 million which included a gain related to one of our equity investments of $34 million, as well as a gain on investment of $12 million due to the remeasurement of BCE’s previously held equity interest in Q9 to its fair value. See Note 3, Business acquisitions and dispositions for additional details.

In 2015, BCE recognized a gain of $94 million as a result of its divestiture of its 50% ownership in Glentel to Rogers Communications Inc. Refer to Note 3, Business acquisitions and dispositions. Additionally, BCE recognized a $22 million loss on investments, which includes a loss on the sale of a call centre subsidiary, as well as a write down of the fair value of a financial asset related to one of our equity investments.

 

Impairment of assets

In 2015, we recorded an impairment charge of $49 million, of which $38 million was allocated to indefinite-life intangible assets, $9 million to finite-life intangible assets and $2 million to property, plant and equipment. The impairment charge related mainly to our music CGU within our Bell Media segment and resulted from revenue and profitability declines from lower viewership and higher TV content costs. The charge was determined by comparing the carrying value of the CGU to its fair value less costs of disposal. We estimated the fair value of the CGU using both discounted cash flows and market-based valuation models which include five-year cash flow projections derived from business plans reviewed by senior management for the period of January 1, 2016 to December 31, 2020, using a discount rate of 9.0% and a perpetuity growth rate of nil, as well as market multiple data from public companies and market transactions. The carrying value of our music CGU was $171 million at December 31, 2015.

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