HSBC 2004 Annual Report Download - page 332

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
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and locations and the expected completion date of the plan, and actions required to complete the plan indicate
that it is unlikely that significant changes will be made or the plan will be withdrawn.
Acceptances
UK GAAP
• Acceptances outstanding are not included in the consolidated balance sheet.
US GAAP
• Acceptances outstanding and matching customer liabilities are included in the consolidated balance sheet.
Profit and loss presentation
UK GAAP
• The following items are separately disclosed in the profit and loss account:
– Provisions for contingent liabilities and commitments.
– Amounts written off fixed asset investments.
– Gains on disposal of investments and tangible fixed assets.
US GAAP
• The above items are disclosed as follows:
– Provisions for contingent liabilities and commitments are classified as ‘Operating expenses’ .
– Amounts written off fixed asset investments and gains on disposal of investments and tangible fixed assets
are classified as ‘Other operating expense’ and ‘Other operating income’ respectively.
– Gains on disposal of investments and tangible fixed assets are classified as ‘Other operating income’ .
The following tables summarise the significant adjustments to consolidated net income and shareholders’ equity
which would result from the application of US GAAP:
Year ended 31 December
Note 2004 2003 2002
US$m US$m US$m
Net income
Attributable profit of HSBC (UK GAAP) ........................................ 11,840 8,774 6,239
Lease financing ................................................................................ (90) (114) (68)
Shareholders’ interest in long-term assurance fund .......................... a(102) (394) (6)
Pension costs .................................................................................... b(244) 266 (62)
Stock-based compensation ............................................................... c(234) (190) (240)
Goodwill .......................................................................................... d1,845 1,500 845
Internal software costs ...................................................................... f55 13 66
Revaluation of property .................................................................... 139 62 76
Purchase accounting adjustments ..................................................... g(233) (1,018) 15
Intangibles ........................................................................................ (390) (289) –
Derivatives ....................................................................................... h244 (613) 221
Own shares held................................................................................ 17 42 –
Foreign exchange losses/(gains) on available-for-sale securities ...... I1,069 (2,283) (2,197)
Loan origination................................................................................ 119 217 –
Securitisations................................................................................... r(1,097) 683 –
Restructuring provisions ................................................................... (120) 96 –
Other-than-temporary decline in value of available-for-sale
securities ..................................................................................... j36 43 (122)
Foreign exchange losses on Argentine overseas funding .................. k–26 (390)
Taxation : US GAAP....................................................................... l(216) – (30)
on reconciling items ...................................................... (95) 223 475
(311) 223 445
Minority interest in reconciling items .............................................. (37) 187 78
Net income (US GAAP) ................................................................... 12,506 7,231 4,900