## Notes to Consolidated Financial Statements 

[in thousands of Canadian dollars, except per share amounts] 

## December 31, 2012 and 2011 

## (a) Cash-generating units 

CI has two cash-generating units [“CGU”] for the purpose of assessing the carrying amount of the allocated goodwill and intangible assets, being the asset management and asset administration operating segments as described in Note 15. 

## (b) Impairment testing of goodwill 

As at December 31, 2012 and 2011, CI has allocated goodwill of $927,344 and $192,582 to the asset management and asset administration operating segments, respectively. The recoverable amount of goodwill for the asset management and asset administration operating segments as at December 31, 2012 and 2011 has been determined based on a fair value less costs to sell calculation, using a valuation multiple applied to assets under management and assets under administration, respectively. This methodology is commonly used in the marketplace by independent equity research analysts. 

The calculation of the recoverable amounts exceeds the carrying amounts of both the asset management and the asset administration operating segments, including goodwill. Recent equity market performance, recent market transactions and CI’s current market capitalization provide additional evidence that the recoverable amount of these operating segments is in excess of the carrying amounts. 

## (c) Impairment testing of fund contracts 

As at December 31, 2012 and 2011, CI had indefinite life fund management contracts within the asset management CGU of $999,082. These are contracts for the management of open end funds which have no expiry or termination provisions. The fair value of indefinite life intangibles within the asset management operating segment as at December 31, 2012 and 2011 has been determined based on a value in use calculation, using 10 year forecasts and a terminal value for the period thereafter. The key assumptions used in the forecast calculation include assumptions on market appreciation, net sales of funds and operating margins. The terminal value has been calculated assuming a long-term growth rate of 2% per annum in perpetuity [December 31, 2011 - 2%], based on a long-term real GDP growth rate. A discount rate of 7.25% per annum [December 31, 2011 - 8.05%] has been applied to the recoverable calculation. 

The calculation of the recoverable amount exceeds the carrying amount of indefinite life management contracts as at December 31, 2012 and 2011. Recent equity market performance provides additional evidence that the recoverable amount of indefinite life intangibles is in excess of the carrying amount. 

