2.  Statement of compliance (continued):  Income taxes  3. SIGNIFICANT ACCOUNTING POLICIES:  (a) Basis of consolidation  (c) Financial instruments  (b) Revenue recognition  Loans and receivables  Cash and cash equivalents  The Corporation derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it  transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the  risks and rewards of ownership of the financial asset are transferred.  Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such  assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans  and receivables are measured at amortized cost using the effective interest method, less any impairment losses. Loans and receivables are comprised of cash and cash equivalents, and trade and other receivables.  Cash and cash equivalents are comprised of cash balances and banker’s acceptances with original maturities of three months  or less.  47  Notes to Financial Statements  Annual Report  2013  Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all  relevant factors. Management reviews the adequacy of these provisions at the end of the reporting period. However, it is possible  that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these tax  related 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. Subsequent to December 31, 2013, the Corporation received a notice of reassessment from  the Canada Revenue Agency in respect of its taxation year ended July 14, 2009 (the “Reassessment”). Pursuant to the  Reassessment, the deduction of approximately $10 million of non-capital losses by the Corporation was denied, resulting in  reassessed taxes and interest of approximately $3.6 million. The Corporation has received legal advice that it should be entitled  to deduct the non-capital losses and as such, the Corporation remains of the opinion that its July 14, 2009 tax return was filed  correctly and will withstand such Reassessment. The Corporation intends to vigorously defend its tax filing position. In order to do  that, the Corporation is required to pay 50% of the reassessed amount as a deposit to the Canada Revenue Agency. It is possible  that the Corporation may be reassessed with respect to the deduction of its non-capital losses in respect of its tax filings subsequent  to July 14, 2009, on the same basis.  The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial  statements, unless otherwise indicated. Subsidiaries are entities controlled by the Corporation. The financial statements of subsidiaries are included in the consolidated  financial statements from the date that control commences until the date that control ceases.  Intra-Corporation balances and transactions, and any unrealized income and expenses arising from intra-Corporation  transactions, are eliminated in preparing the consolidated financial statements.  The Corporation recognizes revenue from the distributions and royalties it receives from the Private Company Partners as they become  due under the partnership agreement, limited liability corporation agreement, or royalty agreement with each specific Partner.  (i) Subsidiaries  (ii) Transactions eliminated on consolidation  (i) Non-derivative financial assets 