BT 2009 Annual Report Download - page 88

ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS
86 BT GROUP PLC ANNUAL REPORT & FORM 20-F
periods, but which the group has not adopted early. Those which
are relevant to the group’s operations are as follows:
IFRS 2, ‘Share Based Payments – vesting conditions and
cancellations’, (effective from 1 April 2009)
The amendment to IFRS 2 clarifies that only service and
performance conditions are vesting conditions. Any other
conditions are non-vesting conditions, which have to be taken into
account to determine the fair value of the equity instruments
granted. In the case that the award does not vest as the result of a
failure to meet
a non-vesting condition that is within the control of either the
group or the counterparty, this is accounted for as a cancellation.
Cancellations must be treated as accelerated vestings and all
remaining future charges are immediately recognised in the income
statement. IFRS 2 requires retrospective adoption, therefore prior
periods will be restated. The group expects adoption of this
standard to increase the share based payment charge for 2009 by
approximately £110m (2008: £nil). The group is currently assessing
the impact of this standard on the share based payment charge for
the year ended 31 March 2010.
IFRS 3 (Revised), ‘Business Combinations’ (effective from
1 April 2010)
IFRS 3 (Revised) amends certain aspects of accounting for
business combinations set out in IFRS 3. Amendments include
the requirement to expense all transaction costs as incurred and
the requirement for all payments to acquire a business to be
recorded at fair value at the acquisition date, with some contingent
payments subsequently re-measured at fair value through the
income statement. IFRS 3 (Revised) is applicable prospectively to
business combinations effected on or after the effective date.
Adoption of this standard will impact how the group accounts for
business combinations entered into on or after 1 April 2010.
IFRS 8, ‘Operating Segments’ (effective from 1 April 2009)
IFRS 8 requires the identification of operating segments based
on internal reporting to the chief operating decision maker and
extends the scope and disclosure requirements of IAS 14,
‘Segmental Reporting’. The group does not expect the adoption of
IFRS 8 to significantly impact its segmental analysis disclosure.
IAS 1 (Revised), ‘Presentation of Financial Statements’
(effective from 1 April 2009)
IAS 1 (Revised) prescribes the basis for presentation of financial
statements to ensure comparability both with the entity’s financial
statements of previous periods and with the financial statements
of other entities. IAS 1 (Revised) introduces a number of changes to
the requirements for the presentation of financial statements,
which include the following: the separate presentation of owner
and non-owner changes in equity; requirement for entities making
restatements or reclassifications of comparative information to
present a balance sheet as at the beginning of the comparative
period; and optional name changes for certain primary statements.
Adoption of this revision will result in minor presentational changes
to the group’s financial statements from 1 April 2009.
Amendment to IAS 23, ‘Borrowing Costs’ (effective from
1 April 2009)
The amendment to IAS 23 eliminates the option to expense
borrowing costs attributable to the acquisition, construction or
production of a qualifying asset as incurred. As a result, the group
will be required to capitalise such borrowing costs as part of the
cost of that asset. The group has assessed the impact of this
amendment and does not expect it to have a significant impact on
the group’s financial statements.
IAS 27 (Revised), ‘Consolidated and Separate Financial
Statements’ (effective from 1 April 2010)
IAS 27 (Revised) requires the effects of all transactions with non
controlling interests to be recorded in equity if there is no change in
control. Such transactions will no longer result in goodwill or gains
or losses being recorded. IAS 27 (Revised) also specifies that when
control is lost, any remaining interest should be re-measured to fair
value and a gain or loss recorded through the income statement.
The group has assessed the impact of this interpretation and
concluded that it is not likely to have a significant impact on the
group’s financial statements.
IFRIC 12, ‘Service Concession Arrangements’ (effective from
1 April 2009; effective under full IFRS from 1 April 2008, but not
adopted by the EU until 25 March 2009)
IFRIC 12 addresses the accounting by operators of public-private
service concession arrangements. The group has assessed the
impact of this interpretation and has concluded that it does not
have a significant impact on the group’s financial statements.
IFRIC 13, ‘Customer Loyalty Programmes’ (effective from
1 April 2009)
IFRIC 13 clarifies that where goods and services are sold together
with a customer loyalty incentive, the arrangement is a multiple
element arrangement and the consideration receivable from the
customer should be allocated between the components of the
arrangement in proportion to their fair values. The group has
assessed the impact of this interpretation and has concluded
that it is not likely to have a significant impact on the group’s
financial statements.
Amendment to IFRS 7, ‘Financial Instruments: Disclosures’
(effective 1 April 2009)
The amendments to IFRS 7 introduce a three level hierarchy for fair
value measurement disclosures and require entities to provide
additional disclosures about the relative reliability of fair value
measurements. In addition, the amendments clarify the existing
requirements for the disclosure of liquidity risk. The group will be
required to make additional disclosures to comply with these
amendments.
IFRIC 16, ‘Hedges of a Net Investment in a Foreign Operation’
(effective 1 April 2009)
IFRIC 16 provides guidance on accounting for the hedge of a net
investment in a foreign operation in an entity’s consolidated
financial statements. The standard provides guidance on which risks
are eligible for hedge accounting in accordance with IFRS, as
follows: 1) presentational currency does not create an exposure to
which the entity may apply hedge accounting, 2) the hedging
instruments may be held by an entity or entities within the group,
and 3) while IAS 39, ‘Financial Instruments: Recognition and
Measurement’, must be applied to determine the amount that
needs to be reclassified to profit or loss from the foreign currency
translation reserve in respect of the hedging instrument, IAS 21,
‘The Effects of Changes in Foreign Exchange Rates’, must be
applied in respect of the hedged item. The group does not expect
adoption of this guidance to have a significant impact on the
group’s financial statements.
FINANCIAL STATEMENTS