Nokia 2005 Annual Report Download - page 221

Notes to the Consolidated Financial Statements (Continued)
39. Differences between International Financial Reporting Standards and US Generally
Accepted Accounting Principles (Continued)
Estimated future benefits payments, which reflect expected future service, as appropriate, are
expected to be paid as follows:
Domestic Foreign
Pension Pension
Benefits Benefits
EURm EURm
2006 ............................................................. 9 9
2007 ............................................................. 13 9
2008 ............................................................. 15 10
2009 ............................................................. 16 10
2010 ............................................................. 18 10
2011–2015 ........................................................ 105 62
Reclassification of foreign currency translation
Net foreign exchange gains/(losses) of EUR (161) million, EUR (54) million and EUR 182 million are
included in the determination of net income under US GAAP of which EUR 418 million, EUR (345)
million and EUR (717) million are included in cost of sales for the year ended December 31, 2005,
2004, and 2003, respectively. EUR (568) million, EUR 283 million and EUR 867 million of the net
foreign exchange gains/(losses) are included in the determination of net sales in 2005, 2004 and
2003, respectively.
Reclassification to financial income and expense
Under IFRS, certain net gains of EUR 0 million, EUR 137 million, EUR 65 million in 2005, 2004 and
2003, respectively, have been classified as other operating income in 2005 and 2004, and as a
reduction of cost of sales in 2003. These gains resulted from instruments held for operating
purposes that were considered to be non-hedging derivatives under US GAAP and are classified as
financial income and expense.
Included within the EUR 137 million net gain recognized in 2004 is EUR 160 million, representing
the premium return under a multi-line, multi-year insurance program, see Note 8. Under US GAAP,
this gain represents the settlement of a call option on the counter party’s interest in an
unconsolidated reinsurance subsidiary.
Reclassification of bank and cash
Under US GAAP, bank overdrafts of EUR 46 million and EUR 21 million in 2005 and 2004,
respectively, for which there is a legal right of offset are excluded from short-term borrowings and
included within bank and cash, which has been reflected in total US GAAP assets of
EUR 22,661 million and EUR 22,921 million, respectively.
Reclassification of treasury stock retirement
Under IFRS, the accounting treatment for treasury stock retirement involves an increase in the
share premium account corresponding to the reduction in share capital for the nominal value of
treasury stock retired. Treasury stock is reduced by the acquisition cost of retired treasury stock
with a corresponding reduction in retained earnings.
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