|
|
 | | | |
- close
- close
- close
- close
| |||||||||
This excerpt taken from the ICI 20-F filed Apr 1, 2005. First
Time Adopting of International Financial Reporting Standards, and has provisionally been determined as 1 January 2004. However,
this transition date is subject to finalisation of the Securities and Exchange
Commission (“SEC”) proposed
rule for an exemption from provision of a second year of comparatives. If the
SEC does not confirm this exemption, or the conditions are unduly onerous or
impractical for the Group, the transition date will be 1 January 2003.
As noted in the 2003 Annual Report, the Group established a project team and Steering Committee to oversee the transition to IFRS. The project comprised a number of workstreams covering the areas identified as being impacted by the move to IFRS. There were fourteen of these workstreams covering key specific areas such as financial instruments, foreign exchange, share options, pensions and other areas such as Group policy databases, budget processes, systems and controls, training, presentation of accounts and investor relations. The project team completed an impact analysis of each standard, which identified the main differences between the Group’s existing accounting policies and IFRS, the effect on the reporting process and the system changes required. The Group’s consolidation system was modified to comply with IFRS. Training on IFRS was delivered to key finance staff throughout the Group. The key areas identified that affect the Group accounts under IFRS are as follows: IAS 19 – Employee benefits
IFRS 2 – Share-based payments
The Group does not intend to adopt the exemption under IFRS 2 to apply the standard only to awards made after 7 November 2002, instead a full retrospective approach will be followed in order to provide full year on year comparability of results. IFRS 3 – Business combinations
IAS 21 – The effects of changes
in foreign exchange rates statement, unless the loans can be designated as part of the Group’s investment in its foreign operations, when the exchange gains/losses can then be recognised in reserves. However, IFRS is stricter in determining which loans can be designated as part of the Group’s investment in its foreign operations, including exclusion of intra-group loans that are not in the functional currency of either the lender or the borrower. Group Treasury has taken action to reduce the potential volatility arising from this change in accounting treatment. In particular, significant nonfunctional currency loans have been re-designated into sterling. In addition to the above, the Group partially hedges its net investment in foreign subsidiaries by denominating external debt in a mix of foreign currencies. Under UK GAAP, the goodwill, which was offset against reserves is included as an asset in this hedge calculation. Under IFRS, goodwill in reserves is not designated as an asset and therefore cannot be used in the hedging calculation. The exclusion of goodwill in reserves from the assets in the hedge calculation will introduce volatility into the income statement as a result of the impact of foreign exchange differences arising from movements on that part of the debt that cannot be considered a part of the net investment hedge. IAS 32 / IAS 39 – Financial instruments This excerpt taken from the ICI 6-K filed Mar 16, 2005. First
Time Adopting of International Financial Reporting Standards, and has provisionally been determined as 1 January 2004. However,
this transition date is subject to finalisation of the Securities and Exchange
Commission (“SEC”) proposed
rule for an exemption from provision of a second year of comparatives. If the
SEC does not confirm this exemption, or the conditions are unduly onerous or
impractical for the Group, the transition date will be 1 January 2003.
As noted in the 2003 Annual Report, the Group established a project team and Steering Committee to oversee the transition to IFRS. The project comprised a number of workstreams covering the areas identified as being impacted by the move to IFRS. There were fourteen of these workstreams covering key specific areas such as financial instruments, foreign exchange, share options, pensions and other areas such as Group policy databases, budget processes, systems and controls, training, presentation of accounts and investor relations. The project team completed an impact analysis of each standard, which identified the main differences between the Group’s existing accounting policies and IFRS, the effect on the reporting process and the system changes required. The Group’s consolidation system was modified to comply with IFRS. Training on IFRS was delivered to key finance staff throughout the Group. The key areas identified that affect the Group accounts under IFRS are as follows:
| EXCERPTS ON THIS PAGE:
|
| |||||||
