Unilever 2002 Annual Report Download - page 125

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Classification differences between UK and US GAAP
Revenue recognition
Under US GAAP, certain sales incentive expenses which have been included in operating costs under Unilever’s accounting would be
deducted from turnover. The decrease in turnover for the years to 31 December 2002, 2001 and 2000 is 1 337 million, 1 279 million
and 1 237 million respectively. There is no impact on Unilever’s net profit.
Cash flow statement
Under US GAAP, various items would be reclassified within the consolidated cash flow statement. In particular, interest received, interest
paid and taxation would be part of net cash flow from operating activities, and dividends paid would be included within net cash flow from
financing. In addition, under US GAAP, cash and cash equivalents comprise cash balances and current investments with an original maturity
at the date of investment of less than three months. Under Unilever’s presentation, cash includes only cash in hand or available on demand
less bank overdrafts. Movements in those current investments which are included under the heading of cash and cash equivalents under
US GAAP form part of the movement entitled ‘Management of liquid resources’ in the cash flow statements. At 31 December 2002, the
balance of such investments was 45 million (2001: 9 million; 2000: 58 million).
Recently issued accounting pronouncements
In August 2001, FASB issued SFAS 143, ‘Accounting for Asset Retirement Obligations’. This statement is effective from January 2003 and
requires obligations associated with the retirement of a tangible long-lived asset to be recorded as a liability upon acquisition of the asset.
SFAS 143 would not have a material impact on Unilever’s financial position or results of operations.
In July 2002, the FASB issued SFAS 146, ‘Accounting for Costs Associated with Exit or Disposal Activities’. This standard will require Unilever
to recognise certain costs associated with disposal activities when they are incurred, rather than at the date of a commitment to a disposal
plan. SFAS 146 is effective for disposal activities initiated after 31 December 2002. Given the nature of disposal plans, it is not possible to
determine in advance the impact it might have on Unilever’s financial position at a particular date or Unilever’s results of operations for a
particular period in the future. For 2002, the impact is shown against restructuring costs in the US GAAP reconciliation statements on pages
118 and 119.
In December 2002, the FASB issued SFAS 148, ’Accounting for Stock-Based Compensation - Transition and Disclosure - an Amendment
of SFAS No. 123’. This standard provides two additional transition methods for companies electing to adopt the fair value accounting
provisions of SFAS 123, ’Accounting for Stock-Based Compensation’, but does not change the fair value measurement principles of
SFAS 123. When Unilever adopts the fair value method for accounting for stock options, we expect to use full retrospective restatement.
The impact of this is shown in the table on page 104.
In November 2002, the FASB issued Financial Interpretation No. 45 (FIN 45), ’Guarantor’s and Disclosure Requirements for Guarantees,
Including Direct Guarantees’. Under this interpretation, a guarantor must recognise the fair value of the obligation undertaken in issuing
aguarantee. The initial recognition and initial measurement provisions of this interpretation are applicable on a prospective basis to
guarantees issued or modified after 31 December 2002. FIN 45 is not expected to have a material impact on Unilever’s financial position
or results of operations.
In January 2003, the FASB issued Financial Interpretation No. 46 (FIN 46), ’Consolidation of Variable Interest Entities’. Under this
interpretation, certain entities known as variable interest entities must be consolidated by the primary beneficiary of the entity.
The measurement principles of this interpretation will be effective for Unilever’s 2003 financial statements. FIN 46 is not expected
to have any impact on Unilever’s financial position or results of operations.
Documents on display in the United States
Unilever files and furnishes reports and information with the United States Securities and Exchange Commission (SEC), and such reports
and information can be inspected and copied at the SEC’s public reference facilities in Washington DC, Chicago and New York. Certain
of our reports and other information that we file or furnish to the SEC are also available to the public over the internet on the SEC’s
website at www.sec.gov.
Unilever Annual Report & Accounts and Form 20-F 2002
122 Additional information for US investors
Unilever Group