Net Asset Value

Net asset value represents management’s estimate of the fair value of the common shareholders’ equity of the Corporation. Net asset value is the fair value of?Power Financial’s non-consolidated assets less its net debt and preferred shares.

June 30, 2020 December 31, 2019
Assets ? ?
Investments ? ?
? ?Lifeco 14,762 20,630
? ?IGM 4,880 5,515
? ?Parjointco(1) 2,540 2,541
? ?Other(2) 327 330
Cash and cash equivalents 1,079 1,021
Other assets(3) 456 138
Total assets, at fair value 24,044 30,175
Liabilities and preferred shares ? ?
Debentures 250 250
Other liabilities(4) 319 625
Perpetual preferred shares 2,830 2,830
Total liabilities and preferred shares 3,399 3,705
Net asset value 20,645 26,470
? ?Per share 31.09 39.86

(1)?As part of the Pargesa reorganization, Parjointco holds approximately 90% of Pargesa’s shares at June 30, 2020; the fair value of Parjointco at June?30, 2020 is based on the market value of GBL. At December 31, 2019, the fair value of Parjointco based on the market value of GBL was $3,032?million.
(2)?Includes Power Financial’s investments in Portag3 I, Portag3 II, Wealthsimple and Koho.
(3)?Includes $83 million of dividends declared in the second quarter by IGM and received by the Corporation on July 31,?2020 (same as at December 31, 2019).
(4) In accordance with IAS 12 Income taxes, no deferred tax liability is recognized with respect to temporary differences associated with investments in subsidiaries and jointly controlled corporations as the Corporation is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. If the Corporation were to dispose of an investment in a subsidiary or a jointly controlled corporation, income taxes payable on such disposition would be minimized through careful and prudent tax planning and structuring, as well as with the use of available tax attributes not otherwise recognized on the balance sheet, including tax losses, tax basis, safe income and foreign tax surplus associated with the subsidiary or jointly controlled corporation.

In determining the fair value of assets, investments in subsidiaries, jointly controlled corporations and associates are adjusted to fair value as follows:

  • Investments in publicly traded companies are valued at their market value, measured as the closing share price on the reporting date;
  • Investments in private entities are valued at fair value based on management’s estimate using consistently applied valuation models either based on a valuation multiple or discounted cash flows. Certain valuations are prepared by external valuators or subject to review by external valuators. Market-comparable transactions are generally used to corroborate the estimated fair value. The value of investments in private entities is presented net of any management incentives;
  • Investments in investment funds are valued at the fair value reported by the fund which is net of carried interest or other incentives.

Investments measured at market value and cash represent 98.0% of the total assets at fair value at June 30, 2020 (98.4% at December 31, 2019).

The presentation of the investments in subsidiaries, jointly controlled corporations and associates at fair value is not in accordance with IFRS; net asset value is a non-IFRS financial measure. Refer to the “Non-IFRS Measures and Presentation” section of the Corporation’s most recent Management’s Discussion and Analysis for the definition of non-IFRS financial measures and their reconciliation with IFRS financial measures.

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