inveStment tax creditS (“itcs”) proviSionS, contingent liabilitieS and contingent aSSetS  impairment of non-financial aSSetS Investment tax credits earned as a result of purchasing capital assets are recorded as a reduction to property, plant and equipment.  ITCs are amortized at the same rates as the related capital assets and the amortization of ITCs is recorded as a reduction of the  depreciation of the related capital assets. Investment tax credits also arise as a result of the Company incurring eligible research and development expenses and these credits  are recorded as a reduction to the related expense. Provisions are recognized when present obligations as a result of a past event will probably lead to an outflow of economic resources  from the Company and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain. A present  obligation arises from the presence of a legal or constructive commitment that has resulted from past events, for example, legal  disputes or onerous contracts. Restructuring provisions are recognized only if a detailed formal plan for the restructuring has been  developed and implemented, or management has at least announced the plan’s main features to those affected by it. Provisions are  not recognized for future operating losses. Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the  class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material. Any  reimbursement that the Company can be virtually certain to collect from a third party with respect to the obligation is recognized as  a separate asset. However, this asset may not exceed the amount of the related provision. If the effect of the time value of money is  material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. Where discounting is  used, the increase in the provision due to the passage of time is recognized as a finance cost. All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. In those cases where the possible  outflow of economic resources as a result of present obligations is considered improbable or remote, no liability is recognized, unless  it was assumed in the course of a business combination. In a business combination contingent liabilities are recognized in the course  of the allocation of the purchase price to the assets and liabilities acquired in the business combination. They are subsequently  measured at the higher amount of a comparable provision as described above and the amount initially recognized, less any  amortization. Possible inflows of economic benefits to the Company that do not yet meet the recognition criteria of an asset are  considered contingent assets. They are described along with the Company’s contingent liabilities in  note 11 . The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication  exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable  amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its  value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of  those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset  is considered impaired and is written down to its recoverable amount.  Due to the interdependencies of cash inflows generated by the Company’s assets it has been determined that its CGUs are equal to its operating segments, Canada and the USA. Corporate assets are allocated to the operating segments for purposes of the  impairment testing. In assessing value in use, the estimated future cash flows are discounted to their present value using an after-tax discount rate that  reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs  to sell, an appropriate valuation model is used. These calculations are corroborated by the use of valuation multiples, quoted share  prices and other available fair value indicators. Impairment losses of continuing operations are recognized in the income statement  in those expense categories consistent with the function of the impaired asset.  For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previous  impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or  cash-generating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in  the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is  limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed its carrying amount that would  have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is  recognized in the income statement.  62 HIGH lIneR FooDS InCoRpoRAteD