Nokia 2005 Annual Report Download - page 222

Notes to the Consolidated Financial Statements (Continued)
39. Differences between International Financial Reporting Standards and US Generally
Accepted Accounting Principles (Continued)
Under US GAAP, the accounting treatment for treasury stock retirement does not affect the share
premium account. Instead, the reduction in retained earnings is offset in part by the reduction in
share capital for the nominal value of treasury stock retired. The impact of this difference is a
reduction in the share premium account amounting to EUR 14 million and EUR 8 million in 2005
and 2004, respectively.
Reclassification of minority interests
IFRS requires the presentation of minority interests within equity on the face of the balance sheet.
Under US GAAP, minority interests is presented as a separate item on the face of the balance sheet
outside of equity.
Adoption of pronouncements under US GAAP
In May 2005, the FASB issued FAS 154, Accounting Changes and Error Corrections, a replacement of
APB Opinion No. 20 and FASB Statement No. 3. FAS 154 provides guidance on the accounting for
and reporting of accounting changes and error corrections. FAS 154 is effective for accounting
changes and corrections of errors made in fiscal years beginning after December 15, 2005. The
Group elected to early adopt FAS 154 and as such has characterized the retrospective adoption of
IFRS 2 and IAS 39(R) as a revision. The adoption of FAS 154 did not have a material impact on the
Group’s financial condition or results of operations.
In June 2005, the FASB issued FSP 143-1, Accounting for Electronic Equipment Waste Obligations.
FSP 143-1 and related FASB Interpretation No. 47 provide guidance on how commercial users and
producers of electronic equipment should recognize and measure asset retirement obligations that
arise from European Union (EU) Directive 2002/96/EC on Waste Electrical and Electronic Equipment
(Directive). FSP 143-1 is effective the later of the first reporting period that ends after June 8, 2005
or the date that the EU-member country adopts a law to implement the Directive. The Group has
adopted FSP 143-1 and the statement did not have a material impact on the Group’s financial
statements.
New accounting pronouncements under US GAAP
In November 2005, The FASB issued Staff Position No. (FSP) 115-1 The Meaning of
Other-Than-Temporary Impairment and its Application to Certain Investments. FSP 115-1 provides
accounting guidance for identifying and recognizing other-than-temporary impairments of debt
and equity securities, as well as cost method investments in addition to disclosure requirements.
FSP 115-1 is effective for reporting periods beginning after December 15, 2005. The adoption of
FSP 115-1 is not expected to have a material impact on the Group’s financial condition or results
or operations.
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