BP (BP)

UK Generally Accepted Accounting Policies

        BP prepares its financial statements in accordance with UK generally accepted accounting practice (UK GAAP). The Group's significant accounting policies are summarized in Item 18 — Financial Statements — Note 1 on Page F-10.

        The accounts for the year ended December 31, 2004 have been prepared using accounting policies consistent with those adopted in the preparation of the 2003 accounts, except for the change in accounting policy for pensions and other postretirement benefits and for shares held in employee share ownership plans for the benefit of employee share schemes.

        Segment information for 2003 has been restated to reflect the transfer of NGLs activities from Exploration and Production to Gas, Power and Renewables.

        Inherent in the application of many of the accounting policies used in the preparation of the financial statements is the need for BP management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the accounts and the reported amounts of revenues and expenses during the reporting period. Actual outcomes could differ from the estimates and assumptions used. The following summary provides further information about the critical accounting policies that could have a significant impact on the results of the Group and should be read in conjunction with the Notes on Accounts.

        The accounting policies and areas that require the most significant judgements and estimates to be used in the preparation of the consolidated financial statements are in relation to oil and natural gas accounting, including the estimation of reserves; impairment; and provisions for deferred taxation, decommissioning, environmental liabilities, pensions and other postretirement benefits.

UK Generally Accepted Accounting Policies

        BP prepares its financial statements in accordance with UK generally accepted accounting practice (UK GAAP). The Group's significant accounting policies are summarized in Item 18 — Financial Statements — Note 1 on Page F-10.

        The accounts for the year ended December 31, 2004 have been prepared using accounting policies consistent with those adopted in the preparation of the 2003 accounts, except for the change in accounting policy for pensions and other postretirement benefits and for shares held in employee share ownership plans for the benefit of employee share schemes.

        Segment information for 2003 has been restated to reflect the transfer of NGLs activities from Exploration and Production to Gas, Power and Renewables.

        Inherent in the application of many of the accounting policies used in the preparation of the financial statements is the need for BP management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the accounts and the reported amounts of revenues and expenses during the reporting period. Actual outcomes could differ from the estimates and assumptions used. The following summary provides further information about the critical accounting policies that could have a significant impact on the results of the Group and should be read in conjunction with the Notes on Accounts.

        The accounting policies and areas that require the most significant judgements and estimates to be used in the preparation of the consolidated financial statements are in relation to oil and natural gas accounting, including the estimation of reserves; impairment; and provisions for deferred taxation, decommissioning, environmental liabilities, pensions and other postretirement benefits.