Under Canadian GAAP, the proceeds are being deferred and amortized against the dividends on these preferred shares over the remaining original terms of the swaps. Under United States GAAP, these dividend rate swaps did not qualify for hedge accounting and were recorded on the balance sheet at fair value. As a result, the amortization of the deferred gain under Canadian GAAP is reversed for purposes of United States GAAP. (k) Impact of Adopting Recent Changes  to Accounting Standards Note  28 : Subsequent Events Issuance of Series M-18 Debentures  Acquisition of Nexxlink Technologies Inc. (Nexxlink)  Goodwill and Other Intangible Assets Effective January 1, 2002, we followed the requirements of SFAS No. 142,  Goodwill and Other Intangible Assets . This standard required us to stop amortizing goodwill and indefinite-life intangible assets to earnings and to assess them for impairment each year. It includes a transitional impairment test. Effective June 30, 2002, we: In performing the transitional impairment test, we: We determined a transitional impairment loss of $7,268 million net of tax in the second quarter of 2002. We recorded it as a cumulative effect of a change in accounting policy as of January 1, 2002, as required  by the transitional provisions of SFAS No. 142. Under Canadian GAAP, the transitional impairment loss is recorded as an adjustment to opening retained earnings. The impairment loss related to impaired goodwill  of reporting units in Teleglobe ($6,604 million), Bell Globemedia ($545 million) and Emergis ($119 million). Consolidation of Variable Interest Entities Effective July 1, 2003, we adopted FASB Interpretation (FIN) No. 46,  Consolidation of Variable Interest Entities , on a prospective basis. This interpretation clarifies how On February 11, 2005, Bell Canada issued $700 mil- lion in Series M-18 Medium Term Note Debentures having a maturity date of February 15, 2017 and a fixed interest rate of 5.00%. Following the issuance, Bell Canada swapped the fixed interest rate to a floating rate. The net proceeds from the issuance of the deben- tures will be used to repay maturing short-term debt and for general corporate purposes.  The net assets acquired are approximately $11 mil- lion. The excess purchase price over the net assets acquired has been allocated to goodwill until we com- plete the purchase price allocation, which is expected within 12 months of the acquisition date. As of February 21, 2005, Bell Canada had bought 89% of all the outstanding shares of Nexxlink, a provider  of integrated IT solutions, for $59 million in cash. Bell Canada intends to buy the remaining shares in a sub- sequent transaction by way of amalgamation, which is expected to be approved at a shareholders’ meeting on April 7, 2005. We determined a transitional loss of $25 million net of tax in the third quarter of 2003. We recorded it as a cumulative effect of a change in accounting policy as of July 1, 2003, as required by the transitional pro- visions of FIN No. 46. Under Canadian GAAP, the transitional loss is recorded as an adjustment to retained earnings. See Note 1,  Significant Accounting Policies , for a summary of how this affected our consolidated financial statements. to apply ARB No. 51,  Consolidated Financial Statements , to variable interest entities when equity investors are not considered to have a controlling financial interest or they have not invested enough equity to allow the entity to finance its activities without additional sub- ordinated financial support from other parties.  • allocated our existing goodwill and indefinite-life intangible assets to our reporting units • completed the assessment of the quantitative impact of the transitional impairment test measured at January 1, 2002 on our financial statements. • estimated the fair value of our reporting units based on discounted future cash flows • compared the fair values to those implied by public company trading multiples. Bell Canada Enterprises  2004 Annual Report 121