Use of estimates and judgments

12 Months Ended

Dec. 31, 2023

Use of estimates and judgments [Abstract]

Use of estimates and judgments

5. Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments,

estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,

revenues and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in

the period in which the estimates are revised and in any future period affected. 

Information about critical judgments in applying the accounting policies that have the most significant effect on the amounts

recognized in the consolidated financial statements is discussed below. Further details of the nature of these judgments,

estimates and assumptions may be found in the relevant notes to the consolidated financial statements.

A. Recoverability of long-lived and intangible assets and investments

Cameco assesses the carrying values of property, plant and equipment, intangible assets and investments in associates and

joint ventures when there is an indication of possible impairment. If it is determined that carrying values of assets cannot be

recovered, the unrecoverable amounts are charged against current earnings. Recoverability is dependent upon assumptions

and judgments regarding market conditions, costs of production, sustaining capital requirements, mineral reserves and the

impact of geopolitical events. Other assumptions used in the calculation of recoverable amounts are discount rates, future

cash flows and profit margins. A material change in assumptions may significantly impact the potential impairment of these

assets.

B. Cash generating units

In performing impairment assessments of long-lived assets, assets that cannot be assessed individually are grouped together

into the smallest group of assets that generates cash inflows that are largely independent of the cash inflows from other assets

or groups of assets. Management is required to exercise judgment in identifying these CGUs.

C. Provisions for decommissioning and reclamation of assets

Significant decommissioning and reclamation activities are often not undertaken until near the end of the useful lives of the

productive assets. Regulatory requirements and alternatives with respect to these activities are subject to change over time.

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significant change to either the estimated costs, timing of the cash flows or mineral reserves may result in a material change in

the amount charged to earnings.

D. Income taxes

Cameco operates in a number of tax jurisdictions and is, therefore, required to estimate its income taxes in each of these tax

jurisdictions in preparing its consolidated financial statements. In calculating income taxes, consideration is given to factors

such as tax rates in the different jurisdictions, non-deductible expenses, changes in tax law and management’s expectations of

future operating results. Cameco estimates deferred income taxes based on temporary differences between the income and

losses reported in its consolidated financial statements and its taxable income and losses as determined under the applicable

tax laws. The tax effect of these temporary differences is recorded as deferred tax assets or liabilities in the consolidated

financial statements. The calculation of income taxes requires the use of judgment and estimates. The determination of the

recoverability of deferred tax assets is dependent on assumptions and judgments regarding future market conditions and

production rates, which can materially impact estimated future taxable income. If these judgments and estimates prove to be

inaccurate, future earnings may be materially impacted.

E. Mineral reserves

Depreciation on property, plant and equipment is primarily calculated using the unit-of-production method. This method

allocates the cost of an asset to each period based on current period production as a portion of total lifetime production or a

portion of estimated mineral reserves. Estimates of life-of-mine and amounts of mineral reserves are updated annually and are

subject to judgment and significant change over time. If actual mineral reserves prove to be significantly different than the

estimates, there could be a material impact on the amounts of depreciation charged to earnings.