These excerpts taken from the ICI 6-K filed Mar 21, 2007.
Financial Instruments: Recognition and Measurement came into effect on 1 January 2005 and the Group took the exemption not to restate comparatives. As a result of these standards, a number of financial instruments were recognised or revalued in the opening balance sheet at 1 January 2005, decreasing reserves by £63m. This adjustment principally relates to own shares that the Group has acquired, or is committed to acquire, under forward contracts, to hedge its obligations under various share option schemes, partly offset by the release of a provision held under UK GAAP relating to the same liability.
Financial Instruments: Recognition and Measurement is recognised directly in equity as a separate component of reserves. Amounts that have been recognised directly in equity are recognised in the income statement in the same period or periods during which the hedged forecast transaction impacts the income statement.