6. Actuarial Asset Value Adjustment
The actuarial value of net assets available for benefits is determined by using a formula that smoothes out the effects of the changes in market values over a five-year period. The adjustment represents the deferred portion of gains or losses resulting from the difference between the actual and management’s best estimate of the return on those investments. Differences are deferred and amortized over the current and following four years. Upon adopting CICA Section 4600 for the year commencing January 1, 2011, the actuarial asset value adjustment will no longer be deferred and amortized. All deferred gains and losses will be retroactively recognized.
The following schedule provides the composition of the actuarial asset value adjustment as at December 31: