Notes to consolidated financial statements FOR THE YEARS ENDED JANUARY 31, 2004 AND 2003 (TABULAR FIGURES IN MILLIONS OF CANADIAN DOLLARS, UNLESS OTHERWISE INDICATED) page 96 Bombardier Inc. Annual Report 2003-04 1 CHANGES IN ACCOUNTING POLICIES Impairment of long-lived assets The Corporation early adopted the new accounting recommendations related to the determination of long-lived asset impairment as well as recognition, measurement and disclosure of the impairment, effective February 1, 2003. The adoption of these new recommendations had no material impact on the Corporation’s Consolidated Financial Statements for the year ended January 31, 2004. Disposal of long-lived assets and discontinued operations The Corporation early adopted the new accounting recommendations providing accounting guidance for long-lived assets to be disposed of other than by sale, long-lived assets to be disposed of by sale, and presentation and disclosure for discontinued operations, effective  February 1, 2003. The adoption of these new recommendations had no material impact on the Corporation’s Consolidated Financial Statements for the year ended January 31, 2004. Stock-based compensation and other stock-based payments During the fourth quarter of the year ended January 31, 2004, the Corporation began expensing, with retroactive effect to February 1, 2003, employee stock-based compensation using the fair value based method for all awards granted or modified after February 1, 2003 in accordance with the new accounting recommendations for stock-based compensation and other stock-based payments. Previously, the Corporation accounted for its employee stock-based compensation as capital transactions. The adoption of these new recommendations had no material impact on the Corporation’s Consolidated Financial Statements for the year ended January 31, 2004. Severance and termination benefits and costs associated with exit and disposal activities  In April 2003, the Corporation prospectively adopted the new accounting rules of the Emerging Issues Committee (EIC) relating to “Accounting for Severance and Termination Benefits” (EIC 134) and “Accounting for Costs Associated with Exit and Disposal Activities” (EIC 135). These new accounting rules provide interpretive guidance to harmonize accounting rules for severance and termination benefits and require companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Prior to these rules, a commitment to an exit or disposal plan was sufficient to record the majority of such costs. The Corporation applied these new rules to the restructuring charges recorded as special items after the date of adoption. Accounting for separately priced extended warranty and product maintenance contracts  On December 17, 2003, the Corporation prospectively adopted the new accounting rules of the EIC relating to “Accounting for Separately Priced Extended Warranty and Product Maintenance Contracts” (EIC 143). These new accounting rules apply to extended warranty and product maintenance contracts that are separately priced, as well as those not separately priced but which are accounted for as separate units of accounting in accordance with “Revenue Arrangements with Multiple Deliverables” (EIC 142). These new rules apply to contracts entered into on or after December 17, 2003. The adoption of the new rules had no material impact on the Corporation’s Consolidated Financial Statements for the year ended January 31, 2004. Employee future benefits The Corporation early adopted the additional disclosure recommendations for Employee Future Benefits for current and comparative  year information. 