notes to the Consolidated Financial Statements (cont’d) aCCRued benefitasset (iv) Share-based payments ReCognition of expense foRfeituRes Canadian GAAP – When a defined benefit plan gives rise to an accrued benefit asset, a valuation allowance is recognized for any  excess of the accrued benefit asset over the expected future benefit. The accrued benefit asset is presented in the statement of  financial position net of the valuation allowance. A change in the valuation allowance is recognized in earnings for the period in  which the change occurs.  IFRS – Similar to Canadian GAAP, IFRS limits the recognition of the net benefit asset under certain circumstances to the amount that  is recoverable. Since the Company has elected to recognize all actuarial gains and losses in other comprehensive income, changes in  the valuation allowance are recognized in other comprehensive income in the period in which the changes occurred. As a result, the  Company adjusted its pension expense to reflect this treatment. IFRS 2 is effective for the Company as of January 3, 2010 and is applicable to stock options and grants that are unvested at that date.  The transition rules in IFRS 1 and IFRS 2 as applied by the Company result in the following adjustments being made at the transition date: With respect to the change in the method used to value the share-based payment liability in accordance with IFRS, the Company  recognized the following adjustments: As at and for the fifty-two weeks ended January 1, 2011: A summary of changes in the Company’s accounting policies on transition from Canadian GAAP to IFRS with respect to share-based  payments are as follows: Canadian GAAP – For grants of share-based awards with graded vesting, the total fair value of the award is recognized on a straight- line basis over the employment period necessary to vest the award. IFRS – Each tranche of an award with graded vesting is considered a separate grant with a different vesting date and fair value. Each  grant is accounted for on that basis. As a result, the Company adjusted its expense for share-based awards to reflect this difference in recognition.  Canadian GAAP – Forfeitures of awards are recognized as they occur. IFRS – An estimate is required of the number of awards expected to vest, which is revised if subsequent information indicates that  actual forfeitures are likely to differ from the estimate. The Company restated its equity-settled options granted subsequent to  November 7, 2002, as noted in point (1) above, and incorporated an estimate of forfeitures accordingly and determined that  adjustments to its expense as recognized under Canadian GAAP were not necessary. The Company has included an estimate for  forfeitures in arriving at the fair value of it cash-settled share-based payments. 1. A decrease to accounts payable and accrued liabilities of $0.6 million; and 2. A decrease to shared-based payment expense of $0.6 million. 1. All equity-settled stock options granted subsequent to November 7, 2002 were restated in accordance with IFRS 2; as stated in  the section entitled “IFRS 1 Exemptions”, the transition method selected by the Company was to retroactively apply IFRS 2 to all  equity instruments granted on or after November 7, 2002. As a result of selecting this transition approach, we reversed the  Company’s historical Canadian GAAP equity-settled share-based payment transaction compensation charges and related equity  components, resulting in a reclassification of $0.4 million from contributed surplus to opening retained earnings; 2. All cash-settled options that have not been settled as at the transition date have been restated in accordance with IFRS 2; as a  result we recognized an increase in accounts payable and accrued liabilities of $1.04 million and a corresponding reduction to  opening retained earnings with respect to the Company’s cash-settled share-based payment transactions. The adjustment is a  result of the Company accounting for these share-based payment arrangements using the intrinsic value under Canadian GAAP,  which has been adjusted to reflect the fair value of the liability in compliance with the requirements of IFRS; and 3. The Company also reclassified amounts previously recognized in other long-term liabilities under Canadian GAAP for share- based payments to accounts payable and accrued liabilities. 111 AnnuAl RepoRt 2011