Vodafone 2003 Annual Report Download - page 132

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At 31 March 2003, the Group had outstanding foreign exchange contracts and currency swaps with an aggregate amount of £73m (2002: £28m). These
contracts mature within 69 months (2002: 13 months). The fair value of these contracts was £1m higher than their carrying value at 31 March 2003 (2002:
£1m higher). Profits and losses arising from these instruments are recognised in the profit and loss account when the associated sale or purchase is
recognised or when a hedged transaction is no longer expected to occur.
Investments in foreign entities
It is the Group’s policy not to hedge its international assets with respect to foreign currency balance sheet translation exposure, since net tangible assets
represent a small proportion of the market value of the Group and international operations provide risk diversity.
The fair value of both the interest rate and foreign exchange rate risk management instruments was estimated by discounting the future cash flows to net
present values using appropriate market interest and foreign exchange rates prevailing at the year end.
Goodwill and other intangible assets
Goodwill Mobile telecommunications
Middle East
Europe Asia Pacific and Africa Total
1 April 2002 27,550 6,025 89 33,664
Reclassifications (27,550) (6,025) (89) (33,664)
Additions 108 ––108
Exchange movements 9 ––9
31 March 2003 117 ––117
Intangible assets At 31 March 2003
Gross carrying Accumulated
amount amortisation
£m £m
Finite-lived intangible assets:
Licences 169,592 32,335
Other 8,474 3,754
178,066 36,089
The total amortisation charge for the year ended 31 March 2003, under US GAAP, was £14,619m. The estimated future amortisation charge is as follows:
£m
Year ended 31 March:
2004 14,318
2005 14,224
2006 14,262
2007 14,166
2008 14,363
Concurrent with the adoption of SFAS No. 142, and as a result of these considerations, on 1 April 2002 £33,664m of goodwill was reclassified as licences;
and in accordance with SFAS No. 109, a related deferred tax liability and a corresponding increase to licence value of £19,077m has been recognised. This
relates to the difference in the tax basis versus the book basis of licences. The reclassification, including the related impact on deferred taxes, had no impact
on the Group’s previously reported net income or shareholders equity under US GAAP.
Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003
130
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Continued
37. US GAAP information continued