## Notes to Consolidated Financial Statements 

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

December 31, 2012 and 2011 

## Critical accounting estimates and judgements 

In the process of applying CI’s accounting policies, management has made signifi cant judgements involving estimates and assumptions which are summarized as follows: 

## (i) Impairment of intangible assets 

Indefinite life intangible assets, including goodwill, are tested for impairment annually or more frequently if changes in circumstances indicate that the carrying amount may be impaired. The values associated with intangibles involve estimates and assumptions, including those with respect to future cash infl ows and outfl ows, discount rates and asset lives. These estimates require significant judgement regarding market growth rates, fund flow assumptions, expected margins and costs which could affect CI’s future results if the current estimates of future performance and fair values change. These determinations also affect the amount of amortization expense on fund contracts with finite lives recognized in future periods. 

## (ii) Deferred tax assets 

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profits will be available against which the losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profi ts together with future tax planning strategies. 

## (iii) Provisions for other liabilities 

Due to the nature of provisions, a considerable part of their determination is based on estimates and judgements, including assumptions concerning the future. The actual outcome of these uncertain factors may be materially different from the estimates, causing differences with the estimated provisions. Further details are provided in Note 6. 

## (iv) Share-based payments 

The cost of employee services received (compensation expense) in exchange for awards of equity instruments recognized is estimated using a Black-Scholes option valuation model which requires the use of assumptions. Further details regarding the assumptions used in the option pricing model are provided in Note 7 [b]. 

