Year ended December 31, 2014 

## 3. Significant accounting policies (continued): 

(d) Intangible assets: 

Intangible assets consisting of theFW Rights are recorded at their historical cost. The intangible assets are adjusted to record the contribution of additional restaurants to the Royalty Pool as described in note 4. The FW Rightsare not amortized as they have an indefinite life. 

(e) Distributionsto DIV shareholders: 

The amount of cash available to be distributed to DIV shareholders is determined with reference to the Company’s periodic cash flows from operatingactivities as reported in the consolidated financial statements less interest and fin ancing fees paid on the term loan . 

Distributions to the Company’s shareholders are made monthly based upon available cash. Distributions are recorded when declared and ar e subject to the Company retaining such reasonable working capital reserves as may be considered appropriate by the Company. 

(f) Earnings per share: 

The Company presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic EPS iscalculated by dividing thecomprehensive incomeattributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held, for the effects of all dilutive potential common shares, which comprise share options and restricted stock units gra nted to employees. 

(g) Borrowings: 

Borrowings are initially recognized at fair value net of any financing fees, and subsequently at amortized cost with any difference between the proceeds (net of financing fees) and the redemption value recognized in thecomprehensive income over the period of the borrowing using the effective interest rate method. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for more than twelve months. 

