The Canada Life Assurance Company provides insurance, wealth management, and health care benefits in Canada. Access the 2020 annual report for The Canada Life Assurance Company from the company’s website. 

Instructions

Refer to the consolidated financial statements when answering the following questions. 

a. Note 6 (a) to the consolidated financial statements provides detailed information about the carrying values and fair values of the company’s investments in 2020 and 2019. What does “carrying value” mean? Why are the amounts listed under carrying value sometimes different from the amounts listed under fair value? Which investments are reported on the consolidated balance sheet at fair value and which are reported at amortized cost? 

b. Note 6 (a) includes amounts for stock, equity method. What type of investment does this represent?

c. Refer to the endnotes for Note 6 (a). When does the company designate an investment (financial asset) as fair value through profit or loss? Indicate why some of the reported stocks are listed as “available-for-sale, at cost” when an available-for-sale investment is normally measured at fair value. 

d. Refer to Note 6 (e), which details net investment income. Net investment income is $9,598. How much of this amount arose from fair value adjustments? 

e. Refer to Note 2 (a) Portfolio Investments – Fair Value Measurement. What methodologies are used to determine the fair value of bonds and stocks at fair value through profit or loss and available-for-sale? 

f. Refer to the consolidated statements of comprehensive income. Were there any holding gains or losses (unrealized) reported on FVTOCI investments (the company refers to these investments as available-for-sale assets) during the year? What is a realized gain or loss?