Vodafone 2000 Annual Report Download - page 34

Vodafone AirTouch Plc Annual Report & Accounts for the year ended 31 March 2000
32
Statement of Accounting Policies
Basis of accounting
The financial statements have been prepared in accordance with applicable accounting standards. During the financial year, the Group has adopted the
following Financial Reporting Standards issued by the Accounting Standards Board:
FRS 15 – “Tangible Fixed Assets”
FRS 16 – “Current Tax”
Adoption of these Financial Reporting Standards has not resulted in any restatement of prior year comparatives.
The merger with AirTouch Communications, Inc. has been accounted for as an acquisition in accordance with Financial Reporting Standard 6,
“Acquisitions and Mergers”.
The particular accounting policies adopted are stated below.
Accounting convention
The financial statements are prepared under the historical cost convention.
Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings and include the Group’s share of the
results of its joint ventures and associated undertakings for financial statements made up to 31 March 2000.
Foreign currencies
Transactions in foreign currencies are recorded at the exchange rates ruling on the dates of those transactions, adjusted for the effects of any hedging
arrangements. Foreign currency monetary assets and liabilities, including the Group’s interest in the underlying net assets of joint ventures and
associated undertakings, are translated into sterling at year end rates.
The results of international subsidiary undertakings, joint ventures and associated undertakings are translated into sterling at average rates of exchange.
The adjustment to year end rates is taken to reserves. Exchange differences which arise on the retranslation of international subsidiary undertakings’,
joint ventures’ and associated undertakings’ balance sheets at the beginning of the year and equity additions and withdrawals during the financial year,
are dealt with as a movement in reserves.
Other translation differences are dealt with in the profit and loss account.
Derivative financial instruments
Transactions in derivative financial instruments are undertaken for risk management purposes only.
The Group uses derivative financial instruments to hedge its exposure to interest rate and foreign currency risk. To the extent that such instruments are
matched against an underlying asset or liability, they are accounted for using hedge accounting.
Gains or losses on interest rate instruments are matched against the corresponding interest charge or interest receivable in the profit and loss account
over the life of the instrument. For foreign exchange instruments, gains or losses and premiums or discounts are matched to the underlying transactions
being hedged.
Turnover
Turnover represents the invoiced value, excluding sales taxes, of services and goods supplied by the Group.
Pensions
Costs relating to defined benefit plans, which are periodically calculated by professionally qualified actuaries, are charged against profits so that the
expected costs of providing pensions are recognised during the period in which benefit is derived from the employees’ services.
The costs of the various pension schemes may vary from the funding, dependent upon actuarial advice, with any difference between pension cost and
funding being treated as a provision or prepayment.
Defined contribution pension costs charged to the profit and loss account represent contributions payable in respect of the period.
Research and development
Expenditure on research and development is written off in the year in which it is incurred.
Scrip dividends
Dividends satisfied by the issue of ordinary shares are credited to reserves. The nominal value of the shares issued is offset against the share
premium account.