ix   US GAAP developments
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.