All amounts are in millions of Canadian dollars, except where noted. 

See Note 27, Reconciliation of Canadian GAAP to United States GAAP , for a descrip- tion and reconciliation of the significant differences between Canadian GAAP and United States GAAP that affect our financial statements. 

## Note 1 : Significant Accounting Policies 

Basis of Presentation 

We have prepared the consolidated financial statements according to Canadian generally accepted accounting principles (GAAP). 

We consolidate the financial statements of all of the companies we control. We proportionately consolidate our share of the financial statements of our joint venture interests. All transactions and balances between these companies have been eliminated on consolidation. 

## Comparative Figures 

We have reclassified some of the figures for the com- parative periods in the consolidated financial statements to make them consistent with the presentation for the current period. 

We have restated financial information for previous periods to reflect: 

• the adoption of section 3110 of the Canadian Institute of Chartered Accountants (CICA) Handbook, Asset Retirement Obligations , effective January 2004, as des- cribed under Recent Changes to Accounting Standards • the change in classification of Emergis Inc. (Emergis) and other minor business dispositions to discontinued operations. 

## Using Estimates 

When preparing financial statements according to GAAP, management makes estimates and assumptions relating to: 

• reported amounts of revenues and expenses 

• reported amounts of assets and liabilities 

• disclosure of contingent assets and liabilities. 

Actual results could be different from these estimates. 

## Recognizing Revenue 

We recognize operating revenues when they are earned, specifically when: 

• services are provided or products are delivered to customers 

• there is clear proof that an arrangement exists 

• amounts are fixed or can be determined 

• our ability to collect is reasonably assured. 

In particular, we recognize: 

• fees for long distance and wireless services, and other fees, such as network access fees, licence fees, hosting fees, maintenance fees and standby fees, when we pro- vide the services or over the term of the contract 

• subscriber revenue when customers receive the service 

• advertising revenue when advertisements are aired, or printed and distributed 

• revenue from the sale of equipment when the equip- ment is delivered to customers and accepted 

• revenue on long-term contracts as services are pro- vided, equipment is delivered and accepted, or contract milestones are met. 

When a transaction involves more than one product or service, we allocate revenue to each based on its relative fair value. 

We may enter into arrangements with subcontractors who provide services to our customers. When we act as the principal in these arrangements, we recognize revenue based on the amounts billed to customers. Otherwise, we recognize the net amount that we keep as revenue. 

We accrue an estimated amount for sales returns, based on our past experience, when revenue is recognized. 

We record payments we receive in advance as deferred revenues until we provide the service or deliver the product to customers. Deferred revenues are pre- sented in Accounts payable and accrued liabilities or in Other long-term liabilities on the balance sheet. 

## Cash and Cash Equivalents 

We generally classify highly liquid investments with a short-term maturity of three months or less as Cash and cash equivalents . 

## Securitization of Accounts Receivable 

We consider a transfer of accounts receivable to be a sale when we give up control of them in exchange for proceeds from a trust (other than our retained bene- ficial interest in the accounts receivable). 

We determine the fair value of the accounts receiv- able transferred based on the present value of future expected cash flows, which we project using man- agement’s best estimates of discount rates, weighted average life of accounts receivable, credit loss ratios 

