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Net Investment in Direct Financing Lease

12 Months Ended

Dec. 31, 2016

Net Investment in Direct Financing Lease [Abstract]

NET INVESTMENT IN DIRECT FINANCING LEASE

22. NET INVESTMENT IN DIRECT FINANCING LEASE

Emera’s net investment in direct financing lease primarily relates to Brunswick Pipeline. Brunswick Pipeline commenced service on July 16, 2009, transporting re-gasified LNG for Repsol Energy Canada under a 25-year firm service agreement. The agreement meets the definition of a direct financing capital lease for accounting purposes. The net investment in direct financing lease consists of the sum of the minimum lease payments and residual value net of estimated executory costs and unearned income. The unearned income is recognized in income over the life of the lease using a constant rate of interest equal to the internal rate of return on the lease. Net investment in direct financing lease consists of the following:

As at	December 31		December 31
millions of Canadian dollars		2016		2015
Total minimum lease payments to be received	$	1,194	$	1,202
Less: amounts representing estimated executory costs		(223)		(213)
Minimum lease payments receivable	$	971	$	989
Estimated residual value of leased property (unguaranteed)		183		183
Less: unearned finance lease income		(658)		(686)
Net investment in direct financing lease	$	496	$	486
Principal due within one year (included in “Prepayments and other current assets”)		8		6
Net investment in direct financing lease – long-term	$	488	$	480

Future minimum lease payments to be received for the next five years:
For the	Year ended December 31
millions of Canadian dollars	2017		2018		2019		2020		2021
Minimum lease payments to be received	$	65	$	65	$	65	$	65	$	65
Less: amounts representing estimated executory costs		(11)		(11)		(12)		(12)		(12)
Minimum lease payments receivable	$	54	$	54	$	53	$	53	$	53

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- Definition

The entire disclosure for lessor's leasing arrangements, which includes direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 840
-SubTopic 30
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=25496975&loc=d3e45377-112738

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 840
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6452767&loc=d3e37045-112695

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 840
-SubTopic 10
-Section 55
-Paragraph 47
-URI http://asc.fasb.org/extlink&oid=6584217&loc=d3e38847-112698

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- References

No definition available.

+ Details

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