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International accounting standards
The Council of the European Union (EU)
announced in June 2002 that all European listed companies will be required to
adopt EU endorsed International Financial Reporting Standards (IFRSs) and
International Accounting Standards (IASs) in the preparation of financial
statements from 2005 onwards. This means the group will prepare its first
financial statements in accordance with endorsed IFRSs and IASs for the year
ending 31 March 2006. The international standard setter, the International
Accounting Standards Board (IASB), has undertaken an extensive exercise to
develop new standards and improve existing ones. The work on those standards
that are applicable is now substantially complete. In addition, the IASB may
issue non-mandatory standards up to the date of transition.
Our project
to manage the transition of financial reporting from UK GAAP to international
accounting is progressing well. The group has completed initial high level
assessments of the impact on our results and net assets and rolled out the
initial phase of detailed quantifications of comparative information.
The IFRSs
which will be mandatory in the 2006 financial year are now substantially
complete and, in addition, certain IFRSs may be issued before the 2006
financial year which we may decide to adopt early. The effects of such early
adoptions, if any, cannot be quantified at present. However, we believe that
the major areas of impact on our net profit and shareholders’ funds will be due
to the standards regarding financial instruments, pensions, leases and share
based payments. Details of the required adjustments for the restated periods
will be provided at the appropriate time.
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