recognized in other comprehensive income are subsequently recognized in the statement of income in the same period in which the hedged underlying transaction or firm commitment is recognized in the statement of income. In order to qualify for hedge accounting, the Corporation is required to document in advance the relationship between the item being hedged and  the hedging instrument. The Corporation is also required to document and demonstrate an assessment of the relationship between the hedged item  and the hedging instrument, which shows that the hedge will be highly effective on an ongoing basis. This effectiveness testing is performed at the  end of each reporting period to ensure that the hedge remains highly effective. Derivatives embedded in other financial instruments or contracts are separated from their host contracts and accounted for at fair value when their  economic characteristics and risks are not closely related to those of the host contract. The Corporation has determined that Cardinal's gas purchase  contract contains embedded derivatives requiring separation and measurement at fair value. The features requiring separation include mitigation options and indexing features (see note 9). At each reporting date, the Corporation assesses whether there is objective evidence that financial assets which the Corporation does not adjust to  fair value, are impaired. If such evidence exists, the Corporation recognizes an impairment loss in the consolidated statement of income. The loss is  measured as the difference between the carrying value of the financial asset and the present value of the estimated future cash flows, discounted by  using the instrument's original effective interest rate. Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief  operating decision-maker is responsible for allocating resources and assessing performance of the operating segments. EBITDA is net income (loss), including that net income (loss) related to the non-controlling interest (“NCI”), interest income and net pension interest excluding interest expense, income taxes, depreciation and amortization. EBITDA represents Capstone’s continuing capacity to generate income from operations before taking into account management’s financing decisions and costs of consuming tangible capital assets and intangible assets, which  vary according to their vintage, technological currency, and management’s estimate of their useful life. EBITDA is presented on the consolidated statement of income. Capstone has adopted the following new and revised standards, along with consequential amendments, effective January 1, 2013. These changes  were required due to changes in IFRS and were made in accordance with the applicable transitional provisions and are summarized as follows. IFRS 10, 11 and 12 , Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities, establishes a common  definition for control along with additional disclosure requirements. The adoption of IFRS 10, 11 and 12 did not require any changes to the existing  consolidation approach for any of Capstone's subsidiaries and investees or change the accounting for investments in associates. IAS 27 , Separate Financial Statements and  IAS 28 , Investments in Associates and Joint Ventures, are consistent with the changes to IFRS 10 and 11, respectively. IAS 27, deals with the accounting for subsidiaries, associates and joint ventures in the separate financial statements of the parent  company. IAS 28, prescribes the accounting for investments in associates and sets out the requirements for use of the equity method of accounting. IFRS 13 , Fair value measurement, provides a single framework for measuring fair value along with additional disclosure requirements. The  measurement of fair value of an asset or liability is based on assumptions that market participants would use when pricing the asset or liability under  current market conditions, including assumptions about risk. The adoption of IFRS 13 did not require any adjustments to the valuation techniques  used by Capstone to measure fair value and did not result in any measurement adjustments. IAS 1 , Amendment, presentation of items of other comprehensive income. This amendment required Capstone to group other comprehensive  income items by those that will be reclassified subsequently to net income and those that will not be reclassified. The Company has reclassified  comprehensive income items of the comparative period. These changes did not result in any adjustments to other comprehensive income or  comprehensive income. IAS 19 , Employee Benefits, amendments were applied retroactively and included changes affecting measurement, recognition and disclosure. The amendments only impact Bristol Water's defined benefit pension plan. The changes are summarized as follows: • Interest on pension assets is no longer calculated based on the expected return on plan assets. IFRS now requires interest to be calculated on  the net retirement benefit surplus using the discount rate based on market yields of high quality corporate bonds. Previously, interest income on  plan assets was based on their long-term rate of expected return and was included in interest expense. • Actual running costs, except investment management expenses, are now recognized as current service costs included in operating expenses.  Previously, these expenses were deducted from the expected return on plan assets included in interest expense. 2013 ANNUAL REPORT  65 Impairment of Financial Assets Segment Reporting Earnings before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) Changes to Accounting Policies