BP 2012 Annual Report Download - page 250

39. Capital and reserves continued
Share capital
The balance on the share capital account represents the aggregate nominal value of all ordinary and preference shares in issue, including treasury
shares.
Share premium account
The balance on the share premium account represents the amounts received in excess of the nominal value of the ordinary and preference shares.
Capital redemption reserve
The balance on the capital redemption reserve represents the aggregate nominal value of all the ordinary shares repurchased and cancelled.
Merger reserve
The balance on the merger reserve represents the fair value of the consideration given in excess of the nominal value of the ordinary shares issued in an
acquisition made by the issue of shares.
Own shares
Own shares represent BP shares held in Employee Share Ownership Plans (ESOPs) to meet the future requirements of the employee share-based
payment plans. The ESOPs have waived their rights to dividends on shares held for future awards and are funded by the group. Until such time as the
company’s own shares held by the ESOPs vest unconditionally to employees, the amount paid for those shares is shown as a reduction in shareholders’
equity. Assets and liabilities of the ESOPs are recognized as assets and liabilities of the group.
At 31 December 2012, the ESOPs held 22,428,179 shares (2011 27,784,503 shares and 2010 11,477,253 shares) for potential future awards, which had
a market value of $154 million (2011 $197 million and 2010 $82 million). At 31 December 2012, a further 18,673,926 ordinary share equivalents
(2011 21,420,000 ordinary share equivalents) were held by the group in the form of ADSs to meet the requirements of employee share-based payment
plans in the US.
Treasury shares
Treasury shares represent BP shares repurchased and available for re-issue.
Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising from the translation of the financial statements of foreign operations.
Upon disposal of foreign operations, the related accumulated exchange differences are recycled to the income statement.
Available-for-sale investments
This reserve records the changes in fair value of available-for-sale investments. On disposal or impairment of the investments, the cumulative changes
in fair value are recycled to the income statement.
Cash flow hedges
This reserve records the portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be an effective hedge. For further
information see Note 1.
Share-based payment reserve
This reserve represents cumulative amounts charged to profit in respect of employee share-based payment plans where the scheme has not yet been
settled by means of an award of shares to an individual.
Profit and loss account
The balance held on this reserve is the accumulated retained profits of the group.
248 Financial statements
BP Annual Report and Form 20-F 2012