Income taxes Fair value of financial instruments Sales and marketing accruals (f) SeaSonality of operationS 58 HIGH lIneR FooDS InCoRpoRAteD Due to the seasonality of the Company’s business, comparatives are presented on the consolidated balance sheet for the current and  prior period quarter, in addition to the balances as of the Company’s fiscal year end. Inventory levels fluctuate throughout the year.  This is due to the seasonal closure of plants in Asia during the Lunar New Year period, which results in significantly higher  inventories in December, January, February and March than during the rest of the year. The Company makes estimates to determine the costs associated to the sale of product to be allocated to certain of its variable sales  and marketing expenses, including volume rebates and other sales volume discounts, coupon redemption costs and costs incurred  related to damages. The Company’s estimates include consideration of empirical data and trends combined with future expectations  of volume sales, with estimates being reviewed on a monthly basis for reasonability. Changes in assumptions about these factors  could affect the reported fair value of financial instruments.  Where the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot be derived from  active markets, their fair value is determined using valuation techniques including the discounted cash flow model. The inputs to  these models are taken from observable markets where possible, but where this is not feasible, a degree of estimation is required in  establishing fair values. The estimates include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in  assumptions about these factors could affect the reported fair value of financial instruments. Estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the Company’s  ability to utilize the underlying future tax deductions against future taxable income before they expire. The Company’s assessment is  based upon existing tax laws and estimates of future taxable income. If the assessment of the Company’s ability to utilize the  underlying future tax deductions changes, the Company would be required to recognize more or fewer of the tax deductions as  assets, which would decrease or increase the income tax expense in the period in which this is determined. Significant judgment is  required in determining the global provision for taxation. There are many transactions and calculations for which the ultimate tax  determination is uncertain during the ordinary course of business. The Company maintains provisions for uncertain tax positions  that it believes appropriately reflect its risk with respect to tax matters under active discussion, audit, dispute or appeal with tax  authorities, or which are otherwise considered to involve uncertainty. These provisions for uncertain tax positions are made using the  best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the  adequacy of these provisions at each balance sheet date. However, it is possible that at some future date an additional liability could  result from audits by taxing authorities. Where the final tax outcome of these matters is different from the amounts that were  initially recorded, such differences will affect the tax provisions in the period in which such determination is made. Income taxes in reporting periods are accrued, to the extent practicable, based on current tax expected to be paid or recovered for the  year, and deferred taxes applicable in respect of the temporary differences that will reverse in subsequent periods. The tax rates and  tax laws used to compute the amounts are those that are enacted or substantively enacted at the reporting date in the countries  where the Company operates and generates taxable income. Determination of benefit expense requires assumptions such as the expected return on assets available to fund pension obligations,  the discount rate to measure obligations, the projected age of employees upon retirement, the expected rate of future compensation  and the expected mortality rate of pensioners. For the purpose of calculating the expected return on plan assets, the assets are valued  at fair value. Actual results will differ from results, which are estimated based on assumptions. See  note 14  for certain assumptions  made with respect to employee future benefits.