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Notes to the financial statements
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Changes in accounting policy and presentation |
During the 2005 financial year the group adopted UITF Abstract 38 ‘Accounting for ESOP trusts’ and the related amendments to UITF Abstract 17 (revised 2003) ‘Employee Share Schemes’. UITF 38 changes the presentation of an entity’s own shares held in an ESOP trust from previously being held as
assets to being deducted in arriving at shareholders’ funds. UITF 17 (revised 2003) requires the amounts recognised in the profit and loss account in respect of share awards previously based on the book value of shares held in the ESOP trusts to being based on the fair value of shares at the date the award is
made.
An additional charge of £3 million and a credit of £16 million for the 2004 and 2003 financial years, respectively has been made to the group profit and loss account. The effect on the group’s balance sheet at 1 April 2002 has been to reduce fixed assets by £177 million, to reduce other creditors by £25
million and to reduce shareholders’ funds by £152 million. The prior year adjustment in the statement of total recognised gains and losses is £21 million. Had we not adopted this change the charge to the profit and loss account would have been £18 million higher in the 2005 financial year.
A small number of changes in the presentation of the notes to the financial statements have been made and comparative figures have been restated accordingly as explained in the notes where material.
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