Significant judgment is required in determining the global provision for taxation. There are transactions and calculations during the  ordinary course of business for which the ultimate tax determination is uncertain. 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. 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. The Company makes estimates to determine the costs associated with 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 sales volume,  with estimates being reviewed on a monthly basis for reasonability. Fair value of financial instruments NOTE 3  Significant accounting policies Sales and marketing accruals Business combinations and goodwill Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the  consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each  business combination, the Company elects whether to measure the non-controlling interests in the acquiree at fair value or at the  proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in business  acquisition, integration and other expenses. When the Company acquires a business, it assesses the financial assets and financial liabilities assumed for appropriate classification and  designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This  includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent  consideration classified as an asset or liability that is a financial instrument and within the scope of International Accounting Standard  (“IAS”) 39 Financial Instruments: Recognition and Measurement, is measured at fair value with changes in fair value recognized either in  profit or loss or as a change to OCI. If the contingent consideration is not within the scope of IAS 39, it is measured in accordance with the  appropriate IFRS. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for  non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value  of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly  identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be  recognized at the acquisition date. If the re-assessment still results in an excess of the fair value of net assets acquired over the aggregate  consideration transferred, then the gain is recognized in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing,  goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s CGUs that are expected to  benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed of, the goodwill associated with the  disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed  in these circumstances is measured based on the relative values of the disposed operation and the portion of the CGU retained. ANNUAL REPORT 2013 61