3. Summary of Significant Accounting Policies (continued) Employee Benefits Defined benefit pension plans Defined contribution pension plans Non-pension post-retirement plans Share-Based Payments Teck 2012 Annual Report 88 Notes to Consolidated Financial Statements  Years ended December 31, 2012 and 2011 As an exception, deferred tax assets and liabilities are not recognized if the temporary differences arise from the initial  recognition of goodwill or an asset or liability in a transaction (other than in a business combination) that affects  neither accounting profit nor taxable profit. We are subject to assessments by various taxation authorities, which may interpret tax legislation differently than we  do. The final amount of taxes to be paid depends on a number of factors, including the outcomes of audits, appeals  or negotiated settlements. We account for such differences based on our best estimate of the probable outcome of  these matters. Defined benefit pension plan obligations are based on actuarial determinations. The projected unit credit method is  used to determine the defined benefit obligations, the related current service costs and, where applicable, the past  service costs. Actuarial assumptions used in the determination of defined benefit pension plan assets and liabilities  are based upon our best estimates, including discount rates, expected plan performance, salary escalation, expected  health care costs and retirement dates of employees. Past service costs are recognized as an expense on a straight-line basis evenly throughout the vesting period. To the  extent that the benefits are already vested, immediately following the introduction of changes to a defined benefit plan,  the past service costs are expensed. Actuarial gains and losses, which can arise from differences between expected and actual outcomes or changes in  actuarial assumptions, are recognized immediately through other comprehensive income and directly into retained  earnings. We record expected return on pension assets as part of finance income, and any interest expense related  to the pension obligation as part of finance expense. Depending on their nature, current service costs and vested  past service costs are included in either operating expenses or general and administration expenses. The cost of providing benefits through defined contribution plans is charged to profit as the obligation to contribute  is incurred. We provide health care benefits for certain employees when they retire. Non-pension post-retirement plan obligations  are based on actuarial determinations. The cost of these benefits is expensed over the period in which the employees  render services. These non-pension post-retirement benefits are funded by us as they become due. The fair value method of accounting is used for share-based payment transactions. Under this method, the cost of  share options and other equity-settled share-based payment arrangements is recorded based on the estimated fair  value at the grant date, including an estimate of the forfeiture rate, and charged to profit over the vesting period.  For employees eligible for normal retirement prior to vesting, the expense is charged to profit over the period from  the grant date to the date they are eligible for retirement. Share-based payment expense relating to cash-settled awards, including deferred and restricted share units, is  accrued over the vesting period of the units based on the quoted market value of Class B subordinate voting shares.  As these awards will be settled in cash, the expense and liability are adjusted each reporting period for changes in  the underlying share price.