Vodafone 1999 Annual Report Download - page 70

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P58-59 USA Accounting Principals
Capitalisation of interest costs
Under UK GAAP, the policy of the Group is not to include interest on borrowings used to finance the construction of an
asset in the cost of the asset. Under US GAAP, the interest cost on borrowings used to finance the construction of an
asset is capitalised during the period of construction until the date that the asset is placed in service. This interest cost is
amortised over the estimated useful life of the related asset.
Pension costs
Under both UK GAAP and US GAAP pension costs are provided so as to provide for future pension liabilities. However,
there are differences in the prescribed methods of valuation, which give rise to GAAP adjustments to the pension cost and
the pension prepayment.
Employee share trusts
Under UK GAAP, the tax benefits receivable in relation to employee share trust arrangements are shown as a component
of the tax charge for the year. Under US GAAP this tax benefit is allocated to shareholders’ equity.
Dividends
Under UK GAAP, dividends are included in the financial statements when recommended by the Board of directors to the
shareholders in respect of the results for a financial year. Under US GAAP, dividends are not included in the financial
statements until declared by the Board of directors.
Defeasance of liabilities
Under UK GAAP, liabilities which have been unconditionally satisfied by monetary assets placed in trust and other set off
arrangements are considered to be extinguished. Under US GAAP, non-recognition of a liability is allowed only if the
liability has legally been extinguished.
Earnings per ordinary share
Basic earnings per ordinary share has been calculated by dividing net income of £510.4m and £374.2m for the years
ended 31 March 1999 and 1998 respectively, by 3,089 million and 3,073 million, which are the approximate weighted
average number of ordinary shares outstanding for the years ended 31 March 1999 and 1998 respectively. For diluted
earnings per share, the approximate weighted average number of ordinary shares outstanding for the years ended 31
March 1999 and 1998 was 3,102 million and 3,082 million respectively.
http://www.vodafone.com/download/investor/reports/annual99/USA_Accounting_Principals.htm (3 of 3)30/03/2007 00:12:25