Material Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Corporate information and statement of IFRS compliance [abstract]

Schedule of significant estimates and judgments

Significant estimates and judgments have been made in the following areas and are discussed as noted:


Insurance contract and investment contract assumptions and measurement			Note 1 Insurance Contracts and Investment Contract Liabilities Note 10 Insurance Contracts
Determination of fair value			Note 1 Basis of Consolidation Note 1 Determination of Fair Value Note 3 Acquisitions and Other Note 5 Total Invested Assets and Related Net Investment Income
Determination of fair value of insurance contracts on transition for adoption of IFRS 17			Note 2 Changes in Accounting Policies

Income taxes			Note 1 Income Taxes Note 19 Income Taxes
Pension plans			Note 1 Pension Plans and Other Post-Retirement Benefits Note 24 Pension Plans and Other Post-Retirement Benefits
Goodwill and intangible assets on acquisition and impairment			Note 1 Goodwill Note 1 Intangible Assets Note 3 Acquisitions and Other Note 9 Goodwill and Intangible Assets
Determination of control for purpose of consolidation			Note 1 Basis of Consolidation Note 15 Interests in Other Entities
Share-based payments			Note 18 Share-Based Payments

Summary of financial assets


			IFRS 9
Cash, cash equivalents and short-term securities			FVTPL
Debt securities			FVTPL, FVOCI
Equity securities			FVTPL, FVOCI
Mortgages and loans			FVTPL, FVOCI, Amortized cost
Other financial invested assets			FVTPL

The carrying values and fair values of our financial assets and liabilities are shown in the following table:


As at	December 31, 2023					December 31, 2022
						(restated, see Note 2)
	Carrying value			Fair value		Carrying value			Fair value
Financial assets
Cash, cash equivalents and short-term securities – FVTPL		$	13,173	$	13,173		$	11,219	$	11,219
Debt securities – FVTPL(1)		61,180		61,180			59,357		59,357
Debt securities – FVOCI		14,313		14,313			16,545		16,545
Equity securities – FVTPL		7,070		7,070			7,148		7,148
Equity securities – FVOCI		68		68
Mortgages and loans – FVTPL(2)		50,552		50,552			47,208		47,208
Mortgages and loans – FVOCI		1,948		1,948			1,804		1,804
Mortgages and loans – Amortized cost(3)		2,100		2,006			2,241		2,106
Derivative assets – FVTPL		2,183		2,183			2,095		2,095
Other financial invested assets (excluding CLOs) – FVTPL(4)		6,883		6,883			6,538		6,538
Other financial invested assets (CLOs) – FVTPL(7)		3,478		3,478			2,880		2,880
Total(5)		$	162,948	$	162,854		$	157,035	$	156,900
Financial liabilities
Investment contract liabilities – Amortized cost		$	11,672	$	11,672		$	10,728	$	10,728
Obligations for securities borrowing – FVTPL		223		223			73		73
Derivative liabilities – FVTPL		1,311		1,311			2,351		2,351
Other financial liabilities – Amortized cost(6)		2,449		2,348			1,996		1,852
Other financial liabilities (CLOs) – FVTPL(7)		3,247		3,247			2,816		2,688
Total(8)		$	18,902	$	18,801		$	17,964	$	17,692

(1) Includes primarily debt securities that are designated at FVTPL.

(2) Includes primarily mortgages and loans that are designated at FVTPL.

(3) Certain mortgages and loans are carried at amortized cost. The fair value of these mortgages and loans, for disclosure purposes, is determined based on the methodology and assumptions described in Note 5.A.iii. As at December 31, 2023, $1,994 and $12 are categorized in Level 2 and Level 3, respectively, of the fair value hierarchy described in this Note (December 31, 2022 — $2,105 and $1, respectively).

(4) Other financial invested assets include our investments in segregated funds, mutual funds, and limited partnerships.

(5) Invested assets on our Consolidated Statements of Financial Position of $174,328 (December 31, 2022 — $168,789) includes Total financial assets in this table, Investment properties of $9,723 (December 31, 2022 — $10,102), and Other non-financial invested assets of $1,657 (December 31, 2022 — $1,652). Other non-financial invested assets consists of investment in associates, subsidiaries and joint ventures which are not consolidated.

(6) Amount reflects the obligations to purchase outstanding shares of certain SLC Management subsidiaries.

(7) See below for details on CLOs.

(8) Total financial liabilities excluding Senior debentures (Note 12) and Subordinated debt (Note 13).

The following table provides a reconciliation of the beginning and ending balances for assets that are categorized in Level 3:


For the years ended	Debt securities at FVTPL			Debt securities at FVOCI			Equity securities at FVTPL			Equity Securities at FVOCI			Mortgages & loans at FVTPL			Mortgages & loans at FVOCI			Other financial invested assets at FVTPL			Investment properties at FVTPL			Total invested assets measured at fair value				Investments for account of segregated fund holders			Total assets measured at fair value
December 31, 2023
Beginning balance		$	394		$	52		$	101		$	70		$	2,054		$	16		$	5,555		$	10,102			$	18,344		$	631		$	18,975

Included in net income(1)(2)(3)		9			—			13			—			119			(8)			(169)			(520)				(556)			(15)			(571)
Included in OCI(2)		—			3			—			—			—			1			—			—				4			—			4
Purchases / Issuances		211			153			18			—			293			8			984			391				2,058			173			2,231
Sales / Payments		(8)			(6)			(19)			(1)			(75)			(17)			(261)			(220)				(607)			(444)			(1,051)
Settlements		(6)			(6)			—			—			(7)			—			—			—				(19)			(1)			(20)
Transfers into Level 3(4)		8			—			—			—			382			—			—			—				390			—			390
Transfers (out) of Level 3(4)		(200)			(8)			—			—			(710)			—			—			—				(918)			—			(918)
Foreign currency translation(5)		(6)			(1)			—			(1)			—			—			(35)			(30)				(73)			(3)			(76)
Ending balance		$	402		$	187		$	113		$	68		$	2,056		$	—		$	6,074		$	9,723			$	18,623		$	341		$	18,964
Unrealized gains (losses) included in earnings relating to instruments still held(1)		$	5		$	—		$	9		$	—		$	112		$	(8)		$	(170)		$	(522)			$	(574)		$	(18)		$	(592)
December 31, 2022
(restated, see Note 2)
Beginning balance		$	152		$	53		$	170					$	12,251		$	17		$	3,650		$	9,109			$	25,402		$	611		$	26,013

Included in net income(1)(2)(3)		(23)			1			5						(3,086)			(15)			334			625				(2,159)			(32)			(2,191)
Included in OCI(2)		—			(12)			—						—			—			—			—				(12)			—			(12)
Purchases / Issuances		310			86			7						1,782			—			1,843			664				4,692			78			4,770
Sales / Payments		—			(2)			(16)						(506)			—			(313)			(430)				(1,267)			(6)			(1,273)
Settlements		(1)			—			—						—			—			(47)			—				(48)			(1)			(49)
Transfers into Level 3(4)		—			—			—						25			14			—			—				39			—			39
Transfers (out) of Level 3(4)(6)		(49)			(74)			—						(8,572)			—			—			—				(8,695)			—			(8,695)
Foreign currency translation(5)		5			—			5						160			—			88			134				392			(19)			373
Ending balance		$	394		$	52		$	171					$	2,054		$	16		$	5,555		$	10,102	$	—	$	18,344		$	631		$	18,975
Unrealized gains (losses) included in earnings relating to instruments still held(1)		$	(23)		$	—		$	—					$	(3,089)		$	(15)		$	295		$	612			$	(2,220)		$	(20)		$	(2,240)

(1) Included in Net investment income (loss) in our Consolidated Statements of Operations for Total invested assets measured at fair value.

(2) Total gains and losses in net income (loss) and OCI are calculated assuming transfers into or out of Level 3 occur at the beginning of the period. For an asset or liability that transfers into Level 3 during the reporting period, the entire change in fair value for the period is included in the table above. For transfers out of Level 3 during the reporting period, the change in fair value for the period is excluded from the table above.

(3) Investment properties included in net income is comprised of fair value changes on investment properties of $(486) for the year ended December 31, 2023, (December 31, 2022 — $667), net of amortization of leasing commissions and tenant inducements of $34 for the year ended December 31, 2023, (December 31, 2022 — $42). As at December 31, 2023, we have used assumptions that reflect known changes in the property values including changes in expected future cash flows.

(4) Transfers into Level 3 occur when the inputs used to price the assets and liabilities lack observable market data, and as a result, no longer meet the Level 1 or 2 definitions at the reporting date. Transfers out of Level 3 occur when the pricing inputs become more transparent and satisfy the Level 1 or 2 criteria and are primarily the result of observable market data being available at the reporting date, thus removing the requirement to rely on inputs that lack observability.

(5) Foreign currency translation relates to the foreign exchange impact of translating Level 3 assets and liabilities of foreign subsidiaries from their functional currencies to Canadian dollars.

(6) Mortgages and loans were classified as amortized cost under IAS 39 for the year ended December 31, 2021. On application of the classification overlay on January 1, 2022, mortgages and loans are measured at FVTPL or FVOCI. During the fourth quarter of 2022, we had a change to our fair value methodology for mortgages and loans that constitutes a change in estimate as at December 31, 2022. Levelling changed from Level 3 to Level 2 as a result of applying fair value enhancements in valuing mortgages and loans supporting insurance liabilities. See Mortgages and loans section above for further details.

Fair value and foreign currency changes on assets and liabilities presented in our Consolidated Statements of Operations consist of the following:



For the year ended December 31, 2022
	(restated, see Note 2)
Fair value change:
Cash, cash equivalents and short-term securities		$	4
Debt securities		(15,846)
Equity securities		(1,167)
Mortgages and loans		(8,909)
Derivative investments		(2,148)
Other financial invested assets		129
Other liabilities – obligations for securities borrowing		15
Total change in fair value of assets and liabilities recognized in income		(27,922)
Fair value changes on investment properties		667
Foreign exchange gains (losses)(1)		573
Realized gains (losses) on property and equipment(2)		100
Fair value and foreign currency changes on assets and liabilities(3)		$	(26,582)

(1) Primarily arises from the translation of foreign currency denominated FVOCI monetary assets and mortgage and loans. Any offsetting amounts arising from foreign currency derivatives are included in the fair value change on derivative investments.

(2) In June 2022, we sold and leased back our Wellesley office in the U.S. The transaction qualified as a sale and operating lease and as a result, we recognized a pre-tax gain of $100 for the year ended December 31, 2022.

(3) Net investment income (loss) on our Consolidated Statements of Operations of $(20,580) for the year ended December 31, 2022 includes Fair value and foreign currency changes on assets and liabilities in this table of $(26,582) and Total interest and other investment income of $6,002.

Cash, cash equivalents and short-term securities presented in our Consolidated Statements of Financial Position and Net cash, cash equivalents and short-term securities presented in our Consolidated Statements of Cash Flows consist of the following:


As at December 31,	2023		2022

Cash	$	2,001	$	3,068
Cash equivalents	9,169		6,310
Short-term securities	2,003		1,841
Cash, cash equivalents and short-term securities	13,173		11,219
Less: Bank overdraft, recorded in Other liabilities	—		6
Net cash, cash equivalents and short-term securities	$	13,173	$	11,213

The carrying value of debt securities by geographic location is shown in the following table. The geographic location is based on the country of the creditor's parent.


As at December 31,	2023									2022
										(restated, see Note 2)
	FVTPL			FVOCI			Total debt securities			FVTPL			FVOCI			Total debt securities
Canada		$	30,180		$	4,339		$	34,519		$	26,613		$	6,064		$	32,677
United States		20,111			6,266			26,377			20,274			6,196			26,470
United Kingdom		1,224			517			1,741			2,760			737			3,497
Other		9,665			3,191			12,856			9,710			3,548			13,258
Total debt securities		$	61,180		$	14,313		$	75,493		$	59,357		$	16,545		$	75,902

The carrying value of debt securities by issuer and industry sector is shown in the following table:


As at December 31,	2023									2022
										(restated, see Note 2)
	FVTPL			FVOCI			Total debt securities			FVTPL			FVOCI			Total debt securities
Debt securities issued or guaranteed by:
Canadian federal government		$	5,161		$	849		$	6,010		$	3,696		$	1,915		$	5,611
Canadian provincial and municipal government		13,694			557			14,251			12,612			1,053			13,665
U.S. government and agency		712			658			1,370			759			778			1,537
Other foreign government		3,329			473			3,802			3,755			869			4,624
Total government issued or guaranteed debt securities		22,896			2,537			25,433			20,822			4,615			25,437
Corporate debt securities by industry sector:
Financials		8,171			2,889			11,060			8,232			3,123			11,355
Utilities		6,244			815			7,059			5,884			792			6,676
Industrials		4,510			979			5,489			4,533			1,042			5,575
Energy		2,793			479			3,272			2,978			364			3,342
Communication services		2,727			422			3,149			2,861			468			3,329
Real estate		1,987			538			2,525			1,865			641			2,506
Health care		1,625			413			2,038			1,618			416			2,034
Consumer staples		1,490			315			1,805			1,634			344			1,978
Consumer discretionary		950			776			1,726			1,085			751			1,836
Information technology		730			174			904			1,095			289			1,384
Materials		922			180			1,102			1,077			218			1,295
Total corporate debt securities		32,149			7,980			40,129			32,862			8,448			41,310
Asset-backed securities		6,135			3,796			9,931			5,673			3,482			9,155
Total debt securities		$	61,180		$	14,313		$	75,493		$	59,357		$	16,545		$	75,902

The carrying value of mortgages and loans by geographic location and type is shown in the following tables. The geographic location for mortgages is based on location of property, while for corporate loans it is based on the country of the creditor's parent.


As at December 31, 2023	Canada			United States			United Kingdom			Other		Total
Mortgages:
Retail		$	1,376		$	1,182		$	—	$	—	$	2,558
Office		1,500			1,254			—		—		2,754
Multi-family residential		3,838			1,001			—		—		4,839
Industrial		1,839			1,115			—		—		2,954
Other		824			57			159		—		1,040
Total mortgages(1)		$	9,377		$	4,609		$	159	$	—	$	14,145
Loans		$	12,924		$	17,086		$	4,089	$	6,356	$	40,455
Total mortgages and loans		$	22,301		$	21,695		$	4,248	$	6,356	$	54,600

(1) $4,023 of mortgages in Canada are insured by the CMHC.


As at December 31, 2022 (restated, see Note 2)	Canada			United States			United Kingdom			Other		Total
Mortgages:
Retail		$	1,455		$	1,364		$	—	$	—	$	2,819
Office		1,603			1,411			—		—		3,014
Multi-family residential		3,869			1,145			—		—		5,014
Industrial		1,669			996			—		—		2,665
Other		767			113			29		—		909
Total mortgages(1)		$	9,363		$	5,029		$	29	$	—	$	14,421
Loans		$	12,433		$	15,468		$	3,979	$	4,952	$	36,832
Total mortgages and loans		$	21,796		$	20,497		$	4,008	$	4,952	$	51,253

(1) $4,035 of mortgages in Canada are insured by the CMHC.

The contractual maturities of debt securities are shown in the following table. Actual maturities could differ from contractual maturities because of the borrower's right to call or extend or right to prepay obligations, with or without prepayment penalties.


As at December 31,	2023									2022
										(restated, see Note 2)
	FVTPL			FVOCI			Total debt securities			FVTPL			FVOCI			Total debt securities
Due in 1 year or less		$	1,697		$	3,079		$	4,776		$	1,629		$	2,131		$	3,760
Due in years 2-5		8,763			6,272			15,035			8,983			7,908			16,891
Due in years 6-10		9,513			2,199			11,712			9,488			3,370			12,858
Due after 10 years		41,207			2,763			43,970			39,257			3,136			42,393
Total debt securities		$	61,180		$	14,313		$	75,493		$	59,357		$	16,545		$	75,902

The carrying value of mortgages by scheduled maturity, before the allowance for ECL, is as follows:


As at December 31,	2023												2022
	FVTPL			FVOCI			Amortized cost			Total			FVTPL			FVOCI			Amortized cost			Total
Due in 1 year or less		$	852		$	58		$	171		$	1,081		$	1,009		$	251		$	78	$	1,338
Due in years 2-5		5,605			222			1,129			6,956			4,631			266			1,152		6,049
Due in years 6-10		3,510			8			495			4,013			4,068			11			711		4,790
Due after 10 years		2,093			3			—			2,096			2,244			—			—		2,244
Total mortgages		$	12,060		$	291		$	1,795		$	14,146		$	11,952		$	528		$	1,941	$	14,421

The carrying value of loans by scheduled maturity, before the allowance for ECL, is as follows:


As at December 31,	2023												2022
	FVTPL			FVOCI			Amortized cost			Total			FVTPL			FVOCI			Amortized cost			Total
Due in 1 year or less		$	2,285		$	257		$	126		$	2,668		$	2,464		$	178		$	156	$	2,798
Due in years 2-5		6,768			966			163			7,897			6,028			789			125		6,942
Due in years 6-10		9,177			401			27			9,605			7,797			288			19		8,104
Due after 10 years		20,262			33			—			20,295			18,967			21			—		18,988
Total loans		$	38,492		$	1,657		$	316		$	40,465		$	35,256		$	1,276		$	300	$	36,832