Notes to Consolidated Financial Statements A curtailment is a significant reduction in plan benefits that can result when a DB pension plan is amended  or restructured. Types of  curtailments include: • a reduction in the expected number of years of future service of active employees • the elimination of the right to earn defined benefits for some or all of the future service of employees. A company makes a settle- ment when it substantially settles all or part of an accrued benefit obligation. An example is a lump-sum cash payment to employees in exchange for their rights to receive future benefits. We amortize past service costs from plan amend- ments on a straight-line basis over the average remain- ing service period of employees who were active on  the day of the amendment. This represents the period that we expect to realize economic benefits from the amendments. Transitional assets and obligations that arose upon implementation of new accounting standards for employee future benefits are amortized on a straight- line basis over the average remaining service period of employees expected to receive benefits under the plans. We use the corridor approach to recognize actuarial gains and losses into earnings. First we deduct 10% of the benefit obligation or the market-related value of plan assets, whichever is greater, from the unamortized net actuarial gains or losses based on a market-related value basis. Then we amortize the excess over the aver- age remaining service period of active employees. At the end of 2004, this ranges from approximately 10 to 17 years, with a weighted average period of 14 years. When the restructuring of a benefit plan results  in both a curtailment and a settlement of obligations, we account for the curtailment before we account for the settlement. December 31 is the measurement date for most of our employee benefit plans. Our actuaries perform a valua- tion at least every three years to determine the actuarial present value of the accrued pension and other retire- ment benefits. The last actuarial valuation of most of our pension plans was performed on January 1, 2003. Some of our subsidiaries offer defined contribution (DC) plans that provide certain employees with pen- sion benefits. In January 2005, BCE Inc. and Bell Canada intro- duced a DC pension plan for its employees. Current employees had the option of retaining their DB cover- age or switching to the new DC coverage. Going forward, most new employees will partici- pate in the DC pension arrangements. We recognize a pension cost for DC plans when the employee provides service to the company, essentially coinciding with the cash contributions to the plan. 90 Bell Canada Enterprises  2004 Annual Report We credit to share capital any amount employees pay when they exercise their stock options or buy shares. We recognize the contributions BCE Inc. makes under ESPs as compensation expense. We also recognize compensation expense or recovery relating to SCPs. • setting specific performance targets that must be met before the option can be exercised. • the value of the long-term incentive plans where stock options are granted was reduced to account for the introduction of a new mid-term incentive plan that uses RSUs Starting in 2004, we made a number of prospective changes to the key features in our stock-based com- pensation plans, including: BCE Inc.’s stock-based compensation plans include employee savings plans (ESPs), restricted share units (RSUs) and long-term incentive plans. Before 2000, the long-term incentive plans often included SCPs. We expense all subscriber acquisition costs when  services are activated.  We calculate future income taxes using the rates enacted by tax law and those substantively enacted. A tax law is substantively enacted when it has been tabled in the legislature but may not have been passed into law. The effect of a change in tax rates on future income tax assets and liabilities is included in earnings in the period when the change is substantively enacted. • the benefit of losses and non-refundable tax credits that will more likely than not be realized and carried forward to future years to reduce income taxes. • the temporary differences between the carrying amounts of assets and liabilities for accounting purposes and the amounts used for tax purposes, on an after- tax basis Current income tax expense is the estimated income taxes payable for the current year before any refunds or the use of losses incurred in previous years. We use the asset and liability method to account for future income taxes. Future income taxes reflect: Income Taxes Curtailment Settlement (ii) Defined Contribution Plans Subscriber Acquisition Costs Stock-Based Compensation Plans