notes to the Consolidated Financial Statements (cont’d) Goodwill acquired through business combinations and brands with indefinite lives have been allocated to two cash-generating units  for impairment testing purposes.  The cash-generating units have been based on geography, Canada and the U.S., which is consistent with the Company’s identified  operating and reportable segments. Canada and the U.S. operating units are determined to be the smallest identifiable group of assets  that generate cash inflows and are largely independent of the cash inflows from other assets.  Carrying amount of goodwill and brands allocated to each of the cash-generating units are as follows: The recoverable amount of the cash-generating units has been determined based on the fair value less costs to sell (“FVLCS”). In  determining the FVLCS of each of the Canadian and U.S. CGUs, we utilized a discounted cash flow methodology. The discounted cash  flow technique provides the best assessment of what each CGU could be exchanged for in an arm’s-length transaction as fair value is  represented by the present value of expected future cash flows of the business together with the residual value of the business at the  end of the forecast period. The discounted cash flow was applied on an enterprise value basis, where the after-tax cash flows prior to  interest expense are discounted using a weighted average cost of capital (“WACC”). The cash flow projections, covering a five-year  period, were based on financial projections approved by senior management using assumptions that reflect the Company’s most  likely planned courses of action, given Management’s judgment of the most probable set of economic conditions, adjusted to reflect  the perspective of the expectations of a market participant.  The WACC (discount rate applied) terminal capitalization rate and growth rate applied to each CGU’s cash flow projection are outlined  in the following table: The discounted cash flow calculation used for the two cash-generating units is most sensitive to the following assumptions: 73 AnnuAl RepoRt 2011 Summary of key assumptions used in determining the fair value less costs to sell  Terminal   Discount rate (WACC)  capitalization rate  Growth rate  Canada October 2, 2011 valuation date  10.1%  2%  2–3% October 3, 2010 valuation date  11.8%  2%  2–3% January 3, 2010 valuation date  12.7%  2%  1–4% U.S. October 2, 2011 valuation date  12.0%  2%  2–3% October 3, 2010 valuation date  11.4%  2%  2–4% January 3, 2010 valuation date  11.9%  2%  2–4% Carrying amount of brands  Carrying amount  and customer relationships (Amounts in $000s) as restated (note 26 (c)(i)) of goodwill  with indefinite useful lives Canada January 3, 2010  12,474  1,040  January 1, 2011  12,474 1,040  December 31, 2011  12,474 1,040 U.S. January 3, 2010  23,509 9,282  January 1, 2011  27,345  10,982  December 31, 2011  114,313  48,377  Total Company January 3, 2010  35,983  10,322  January 1, 2011  39,819  12,022  December 31, 2011 126,787  49,417  • Discount rate applied (WACC); • Gross margins and raw materials price costs; • Inflation; • Market share during the projection period;  • Growth rate used to extrapolate cash flows beyond the projection period; and • Costs to sell.