BP 2005 Annual Report Download - page 123

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50 First-time adoption of International Financial Reporting Standards continued
Dividend accrual The UK GAAP approach to the recognition of proposed dividends was to account for the dividend in the period to which it related,
e.g. the dividend proposed in February 2005 in respect of the final quarter of 2004 was accrued for in 2004. Under IFRS, the proposed dividend can
be recognized only in the period in which it is properly authorized or paid, which, in the case of BP, is the quarter following that to which the
dividend relates, i.e. the dividend proposed in February 2005 in respect of the fourth quarter of 2004 can be accounted for only in the first quarter
of 2005. Therefore each balance sheet is adjusted to derecognize the dividend declared after the balance sheet date.
Increase (decrease) in caption heading $ million
At 31 December 1 January
2004 2003 2003
Current liabilities – accruals and deferred income (1,821) (1,494) (1,397)
Total equity 1,821 1,494 1,397
Recycling of cumulative currency translation differences on disposal of net investment in foreign operations The consolidation of entities with a
non-US dollar functional currency results in currency translation differences that are taken directly to equity, where they are accumulated. Under
UK GAAP these cumulative currency translation differences remained in equity. IFRS requires that, when an entity is wholly or partially disposed
of, such cumulative translation differences be recycled to the income statement as part of the gain or loss on disposal. In addition, there is a
requirement to maintain such differences as a separate component of equity. In accordance with one of the exemptions in IFRS 1, the amount of
this component has been deemed by BP to be zero at the DoT. Consequently, only those translation differences that arise after the DoT will be
recycled upon disposal of a foreign operation.
Increase (decrease) in caption heading $ million
Years ended
31 December
2004 2003
Gains on sale of businesses and fixed assets 78 –
Profit for the year 78 –
$ million
At 31 December 1 January
2004 2003 2003
Total equity – – –
Other This adjustment includes the IFRS adjustments made to equity-accounted entities.
BP Annual Report and Accounts 2005 121