Vodafone 1999 Annual Report Download - page 59

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Statement of Accounting Policies
accounting. An associated undertaking is a company in which the Group owns a material share of the equity and, in the
opinion of the directors, can exercise significant influence in its management. The profit and loss account includes the
Group’s share of the operating profit or loss, exceptional items, interest income or expense and attributable taxation of
those companies. The balance sheet shows the Group’s share of the net assets or liabilities of those companies, together
with loans advanced and attributed goodwill.
Other investments, held as fixed assets, comprise equity shareholdings, partnership interests and long term loans. They
are stated at cost less provision for any impairment in value. Dividend income is recognised upon receipt and interest
when receivable.
Stocks
Stocks are valued at the lower of cost and estimated net realisable value.
Deferred taxation
Provision is made for deferred taxation only where there is a reasonable probability that a liability or asset will crystallise in
the foreseeable future.
No provision is made for any tax liability which may arise if undistributed profits of certain international subsidiary and
associated undertakings are remitted to the UK, except in respect of planned remittances.
Leases
Rental costs under operating leases are charged to the profit and loss account in equal annual amounts over the periods
of the leases.
Assets acquired under finance leases which transfer substantially all the rights and obligations of ownership are
accounted for as though purchased outright. The fair value of the asset at the inception of the lease is included in tangible
fixed assets and the capital element of the leasing commitment included in creditors. Finance charges are calculated on
an actuarial basis and are allocated over each lease to produce a constant rate of charge on the outstanding balance.
Lease obligations which are satisfied by cash and other assets deposited with third parties are set-off against those
assets in the Group’s balance sheet.
http://www.vodafone.com/download/investor/reports/annual99/statement_of_accounting_policies.htm (4 of 4)30/03/2007 00:11:50