BP 2005 Annual Report Download - page 118

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116 Making energy more
Notes on financial statements continued
50 First-time adoption of International Financial Reporting Standards continued
DIFFERENCES BETWEEN UK GAAP AND IFRS PRESENTATION THAT HAVE NO IMPACT ON BP’S REPORTED INCOME OR TOTAL EQUITY
Accounting for joint arrangements Under UK GAAP, certain of the group’s activities were conducted through joint arrangements and were included in
the consolidated financial statements in proportion to the group’s share of the income, expenses, assets and liabilities of these joint arrangements.
However, IFRS requires that, if such joint arrangements comprise a legal entity, they be treated as jointly controlled entities. The group has chosen to
account for jointly controlled entities under the equity method. The entities affected include Atlantic LNG Trains 2 and 3, a group of German refineries
and chemicals operations, the South Caucasus Pipeline Company and other minor operations.
Increase (decrease) in caption heading $ million
Years ended
31 December
2004 2003
Sales and other operating revenues (274) (185)
Earnings from jointly controlled entities – after interest and tax 34 72
Interest and other revenues (3) (2)
Purchases (82) (93)
Production and manufacturing expenses (44) (7)
Depreciation, depletion and amortization (110) (11)
Distribution and administration expenses 9 –
Taxation (16) (4)
Profit for the year – –
$ million
At 31 December 1 January
2004 2003 2003
Property, plant and equipment (2,297) (2,089) (1,760)
Intangible assets (2) (2) (1)
Investments in jointly controlled entities 2,088 1,963 1,565
Inventories (34) (16) (8)
Trade and other receivables 48 32 (22)
Current assets – prepayments and accrued income (4) 1 –
Cash and cash equivalents (125) (76) (19)
Trade and other payables (280) (41) (245)
Current liabilities – accruals and deferred income (13) (2) –
Other payables – (140) –
Non-current liabilities – accruals and deferred income (2) – –
Deferred tax liabilities (22) (4) –
Provisions (9) – –
Total equity – – –
Presentation of results of equity-accounted entities UK practice in respect of equity accounting is to present the group’s share of the profit before
interest and tax, finance costs, other finance expense, and tax charge of jointly controlled entities and associates in the corresponding line of the
group’s income statement. IFRS requires the presentation of equity-accounted results as a single net profit item in the income statement.
Consequently, the group’s share of all the individual equity-accounted items has been removed from the relevant lines in the income statement and
offset against the results of equity-accounted entities to present them on a net-of-tax basis.
Increase (decrease) in caption heading $ million
Years ended
31 December
2004 2003
Earnings from jointly controlled entities – after interest and tax (1,251) (233)
Earnings from associates – after interest and tax (171) (125)
Finance costs (206) (134)
Taxation (1,173) (224)
Minority interest (43) –
Profit for the year – –
$ million
At 31 December 1 January
2004 2003 2003
Total equity – – –