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and other key assumptions. We recognize a loss on this kind of transaction, which is included in Other income . The loss partly depends on the carrying amount of the accounts receivable that are transferred. We allocate this amount to accounts receivable sold, or to our retained interest, according to its relative fair value on the day the transfer is made. 

Accounts receivable are transferred on a fully-serviced basis. As a result, we: 

• recognize a servicing liability on the day accounts receivable are transferred to the trust 

• amortize this liability to earnings over the expected life of the transferred accounts receivable. 

## Capital Assets 

We carry capital assets at cost, less accumulated amor- tization. Most of our telecommunications assets are amortized using the group depreciation method. When we retire assets in the ordinary course of busi- ness, we charge their original cost to accumulated amortization. In general, we amortize capital assets on a straight-line basis over the estimated useful lives of the assets. We review the estimates of the useful lives of the assets every year and adjust them if needed. 

<img src='content_image/57289.jpg'>

We capitalize construction costs, labour and overhead (including interest) related to assets we build or develop. 

We capitalize some of the costs of developing or buying software for internal use. We expense software maintenance and training costs when they are incurred. The expense is included in Operating expenses in the statement of operations. 

We assess capital assets for impairment when events or changes in circumstances indicate that we may not be able to recover their carrying value. We calculate impairment by deducting the asset’s fair value, based on discounted cash flows expected from its use and disposition, from its carrying value. Any excess is deducted from earnings. 

## Accounting for Investments 

We use the following methods to account for invest- ments that are not consolidated or proportionately consolidated in our financial statements: 

• the equity method for our investments in companies where we have a significant influence on their operat- ing, investing and financing activities 

• the cost method for our investments in all other companies. 

We include investments in Other long-term assets on the balance sheet. Earnings from investments are included in Other income in the statement of operations. 

We expense declines in the fair values of our invest- ments when management considers them to be longer term. The expense is included in Other income in the statement of operations. 

## Costs of Issuing Debt and Equity 

The costs of issuing debt are capitalized in Other long- term assets . They are amortized on a straight-line basis over the term of the related debt and are included in Interest expense in the statement of operations. The costs of issuing equity are reflected in the statement of deficit. 

## Indefinite-Life Intangible Assets 

Our indefinite-life intangible assets consist mainly of the Bell brand name, spectrum licences and television licences. We assess these assets for impairment in the fourth quarter of every year and when events or changes in circumstances indicate that an asset might be impaired. We calculate the impairment by deducting the asset’s fair value, based on estimates of discounted future cash flows or other valuation methods, from its carrying value. Any excess is deducted from earnings. 

## Goodwill 

We assess goodwill of individual reporting units for impairment in the fourth quarter of every year and when events or changes in circumstances indicate that goodwill might be impaired. We assess goodwill for impairment in two steps: 

• we identify a potential impairment by comparing the fair value of a reporting unit to its carrying value. Fair value is based on estimates of discounted future 

## Equity Method 

An investment is initially recorded at cost and adjust- ments are made to include our share of the investment’s net earnings or losses. These adjustments are included in our net earnings. The amount of our investment is reduced by the amount of dividends received or receiv- able from the investment. 

## Cost Method 

The investment is recorded at cost. Dividends received or receivable from the invest- ment are included in our net earnings. 

## Goodwill 

Goodwill is created when we acquire a business. It is calculated by deducting the fair value of the net assets acquired from the considera- tion given and represents the value of factors that contribute to greater earning power, such as a good reputation, customer loyalty or intellectual capital. 

