BP » Topics » (g) Sale and leaseback

This excerpt taken from the BP 20-F filed Jun 13, 2006.

(g)  Sale and leaseback

    The sale and leaseback of an office building in Chicago, Illinois in 1998 was treated as a sale for UK GAAP whereas for US GAAP it was treated as a financing transaction. The remaining interest in this building was sold in January 2003.

    Provisions were recognized under UK GAAP in 1999 and 2002 to cover the likely shortfall on rental income from subletting the Chicago office building. As the original sale and leaseback was not treated as a sale for US GAAP, the provision was reversed for US GAAP. Following the disposal of the building a provision has now been recognized for US GAAP.

    Under UK GAAP the profit arising on the sale and operating leaseback of certain railcars in 1999 was taken to income in the period in which the transaction occurred. Under US GAAP this profit is being amortized over the term of the operating lease.

F - 110


    The adjustments to profit for the year and BP shareholders' interest to accord with US GAAP are summarized below.

 
  Years ended December 31,

 
Increase (decrease) in caption heading

  2004

  2003

  2002

 
 
  ($million)

 
Cost of sales   10   (106 ) (40 )
Taxation   (4 ) 37   16  
Profit for the year   (6 ) 69   24  
   
 
 
 
 
  At December 31,

 
 
  2004

  2003

 
 
  ($million)

 
Other accounts payable and accrued liabilities   21   24  
Provisions   45   32  
Deferred taxation   (23 ) (19 )
BP shareholders' interest   (43 ) (37 )
   
 
 
This excerpt taken from the BP 20-F filed Jun 30, 2005.

(g)  Sale and leaseback

    The sale and leaseback of an office building in Chicago, Illinois in 1998 was treated as a sale for UK GAAP whereas for US GAAP it was treated as a financing transaction. The remaining interest in this building was sold in January 2003.

    Provisions were recognized under UK GAAP in 1999 and 2002 to cover the likely shortfall on rental income from subletting the Chicago office building. As the original sale and leaseback was not treated as a sale for US GAAP, the provision was reversed for US GAAP. Following the disposal of the building a provision has now been recognized for US GAAP.

    Under UK GAAP the profit arising on the sale and operating leaseback of certain railcars in 1999 was taken to income in the period in which the transaction occurred. Under US GAAP this profit is being amortized over the term of the operating lease.

F - 111


    The adjustments to profit for the year and BP shareholders' interest to accord with US GAAP are summarized below.

 
  Years ended December 31,

 
Increase (decrease) in caption heading

  2004

  2003

  2002

 
 
  ($million)

 
Cost of sales   10   (106 ) (40 )
Taxation   (4 ) 37   16  
Profit for the year   (6 ) 69   24  
   
 
 
 
 
  At December 31,

 
 
  2004

  2003

 
 
  ($million)

 
Other accounts payable and accrued liabilities   21   24  
Provisions   45   32  
Deferred taxation   (23 ) (19 )
BP shareholders' interest   (43 ) (37 )
   
 
 

EXCERPTS ON THIS PAGE:

20-F
Jun 13, 2006
20-F
Jun 30, 2005
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