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The group’s net
income (loss) and earnings (loss) per share for the three financial
years ended 31 March 2004 and shareholders’ equity at 31
March 2004 and 2003 under US Generally Accepted Accounting Principles
(US GAAP) are shown further in the United States Generally Accepted
Accounting Principles Section (see Consolidated financial statements).
Differences between UK GAAP and US GAAP include results of the
differing accounting treatment of leasing transactions, pension
costs, redundancy costs, intangible assets, goodwill, deferred
taxation, capitalisation of interest, financial instruments, contributing
assets to joint ventures, stock compensation, and dividends. Cash
flow information under the US GAAP presentation is also shown
further in this document.
In
January 2003, the Financial Accounting Standards
Board (FASB) issued Financial Interpretation No. 46 (FIN 46),
‘‘Consolidation of Variable Interest Entities’’
and in December 2003 issued a revised interpretation, FIN 46R.
The interpretation requires the primary beneficiary to consolidate
a variable interest entity if it has a variable interest that
will absorb a majority of the entity’s losses if they occur,
or receive a majority of the entity’s expected returns or
both. BT had adopted FIN 46 in June 2003, and the further adoption
of FIN 46R did not have a material effect on the results or statement
of financial position of the group.
In
May 2003 the FASB issued SFAS No. 150, ‘‘Accounting
for Certain Financial Instruments with Characteristics of both
Liabilities and Equity’’. SFAS No. 150 establishes standards
for how to classify and measure certain financial instruments
with characteristics of both liabilities and equity. It requires
that an issuer classify a financial instrument that is within
its scope as a liability, or an asset in some circumstances. On
adoption, SFAS No. 150 did not have a material effect on the results
or statement of financial position of the group.
In
November 2002 the Emerging Issues Task Force reached a consensus
on EITF 00-21 ‘‘Revenue arrangements with multiple deliverables’’.
BT adopted this consensus for contracts entered into after 15
June 2003. Adoption of the consensus did not have a material impact
on the results of the group.
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