Management’s Discussion and Analysis Goodwill Impairment Goodwill Impairment Contingencies Income Taxes Contingencies Recent Changes to Accounting Standards We generally measure for impairment using a  projected discounted cash flow method and confirm our assessment using other valuation methods. If the asset’s carrying value is more than its fair value, we record the difference as a reduction in the amount of goodwill on the balance sheet and an impairment charge in the statement of operations. We assess the value of good- will of all reporting units within each of our operating segments every year and when events or changes in circumstances indicate that it might be impaired. We become involved in  various litigation and regula- tory matters as a part of  our business. Each of our operating segments may be  affected. Pending litiga- tion, regulatory initiatives  or regulatory proceedings  represent potential financial loss to our business. We make a number of significant estimates when calculating fair value using a projected discounted cash flow method. These estimates include the assumed growth rates for future cash flows, the numbers of years used in the cash flow model, the discount rate and many others. We believe that all of our estimates are reason- able. They are consistent with our internal planning  and reflect our best estimates, but they have inherent uncertainties that management may not be able  to control. Any changes in each of the estimates used could have a material impact on the calculation of the fair value and resulting impairment charge. As a result, we are unable to reasonably quantify the changes in our overall financial performance if we had used differ- ent assumptions. We cannot predict whether an event that triggers impairment will occur, when it will occur or how it will affect the asset values we have reported. There were no impairment charges recorded in  2004 or 2003. We accrue a potential loss if we believe the loss is prob- able and it can be reasonably estimated. We base our decision on information that is available at the time. We estimate the amount of the loss by consulting with the outside legal counsel that is handling our defence. This involves analyzing potential outcomes and assum- ing various litigation and settlement strategies. Please see Note  1 to the consolidated financial state- ments for more information about the accounting policies we adopted in 2004. These are the result of new accounting standards for: There were no significant changes to the estimates we made in the past two years. Our tax filings are also subject to audits, which could materially change the amount of current and future income tax assets and liabilities. Any change would be recorded as a charge or a credit to income tax expense. Any cash payment or receipt would be included in cash from operating activities. Management believes that it has adequately provided for income taxes based on all of the information that is currently available. The calculation of income taxes in many cases, however, requires significant judgment in interpreting tax rules and regulations, which are con- stantly changing. Each of our operating segments may be affected. None of our operating segments had any significant provisions relating to pending litigation, regulatory initiatives or regulatory proceedings at December 31, 2004. We have not made any significant changes to our estimates in the past two years. If the final resolution of a legal or regulatory matter results in a judgment against us or requires us to pay a large settlement, it could have a material and negative effect on our results of operations, cash flows and financial position in the period that the judgment or settlement occurs. Any accrual would be charged to operating income and included in  Accounts payable and accrued liabilities  or  Other long-term liabilities . Any cash settlement would be included in cash from oper- ating activities. 80 Bell Canada Enterprises  2004 Annual Report • impairment of long-lived assets • asset retirement obligations • hedging relationships.