Unilever 2005 Annual Report Download - page 159

Financial Statements
Unilever Annual Report and Accounts 2005 159
Goodwill
An analysis of goodwill of group companies, joint ventures and associates by reporting segment is given below:
€ million € million € million € million
The
Europe Americas Asia Africa Total
1 January 2004 8 082 7 652 1 101 16 835
Adjustment to prior year acquisitions 309 811 – 1 120
Acquisitions –7–7
Disposals (8) (3) – (11)
Impairment charged to income statement (142) (928) (66) (1 136)
Currency retranslation – (319) (84) (403)
31 December 2004 8 241 7 220 951 16 412
Acquisitions – – 13 13
Disposals (149) (24) (4) (177)
Impairment charged to income statement – (176) (3) (179)
Currency retranslation 56 1 366 138 1 560
31 December 2005 8 148 8 386 1 095 17 629
Indefinite-lived intangible assets
An analysis of net book value of indefinite-lived intangible assets at cost less accumulated amortisation and impairment is given below:
€ million € million
2005 2004
Cost 7 471 6 953
Accumulated amortisation and impairment (1 619) (1 055)
Net book value 31 December 5 852 5 898
Indefinite-lived intangible assets principally comprise trademarks.
Restructuring costs
Under Unilever’s accounting policy, certain restructuring costs relating to employee terminations are recognised when a restructuring plan
has been announced. Under US GAAP, liabilities relating to exit costs are recognised when incurred. Employee termination costs are generally
considered to be incurred when the company has a liability to the employee, unless further service is required from the employee, in which case
costs are recognised as benefits are earned.
Provisions related to excess lease costs for onerous contracts are reduced by assumed sub-lease income for the periods impacted.
Biological assets
In accordance with IAS 41, biological assets are re-measured at fair value less estimated point-of-sale costs at each reporting period. Under
US GAAP these assets are measured at historical cost and depreciated over their useful life.
Interest
Unilever treats all interest costs as a charge to the income statement in the current period. Under US GAAP, interest incurred during the
construction periods of tangible fixed assets is capitalised and depreciated over the life of the assets.
Sale and leaseback
The test for determining if an asset qualifies for treatment as a sale in a sale and leaseback transaction is stricter under US GAAP than that
under IFRSs, in particular where the lessee has continuing involvement. As a result, a sale and leaseback transaction entered into by Unilever
was treated as a sale and operating lease of land and financing lease of a building under IFRSs but as a financing obligation for US GAAP.
Accordingly, under US GAAP the gain on sale of €37 million was reversed in the income statement, the property was reinstated and a financing
obligation of €114 million equivalent to the proceeds received for the sale was recognised.
The lease for this transaction is payable from 30 March 2007 until the lease expiry date of 29 September 2027.
Future commitments for the lease attached to this transaction are:
€ million
The commitments fall due as follows:
Within 1 year –
After 1 year but within 2 years 15
After 2 years but within 3 years 15
After 3 years but within 4 years 15
After 4 years but within 5 years 15
After 5 years 312
Future minimum lease payments 372
Additional information for US investors (continued)
Unilever Group