Vodafone 2003 Annual Report Download - page 32

Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003
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OPERATING AND FINANCIAL REVIEW AND PROSPECTS Continued
UK GAAP, above. Determining the life of an intangible asset, including assessing
whether that life is indefinite, involves a degree of management judgement.
Concurrent with the adoption of SFAS No. 142, “Goodwill and Intangible Assets”,
the Group reviewed its goodwill and intangible assets and concluded that in a
number of the Group’s previous business acquisitions, the primary assets
acquired were licences to provide mobile telecommunications services. As a
result, as at 1 April 2002, £33,664 million of goodwill was reclassified as
licences and a related deferred tax liability and a corresponding increase to
licence value of £19,077 million has been recognised. This 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.
Basis of Consolidation
The Consolidated 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 2003. A listing of the Group’s principal
subsidiary undertakings, joint ventures and associated undertakings is provided
in note 36 to the Consolidated Financial Statements, “Principal subsidiary
undertakings, associated undertakings and investments”.
The Group’s interest in Verizon Wireless, which was formed on 3 April 2000, is
accounted for using equity accounting. In the year ended 31 March 2000,
turnover of £2,585 million and operating losses of £100 million (after goodwill
amortisation) in respect of the Group’s US businesses were fully consolidated.
The results and net assets of Mannesmann have been consolidated in the
Company’s financial statements with effect from 12 April 2000, the date the
acquisition was completed, following conditional European Commission consent.
Businesses sold following the acquisition of Mannesmann, including Atecs,
Orange, Mannesmann’s watches and tubes businesses, Infostrada and tele.ring,
have not been consolidated in the results for the year ended 31 March 2001.
See “Information on the Company – Sales of businesses”. Up until 15 January
2002, the Group’s remaining interest in Atecs was treated as an asset held for
resale.
The results and net assets of Vodafone Spain have been fully consolidated with
effect from 29 December 2000. Prior to the acquisition of a controlling interest,
the Group’s 21.7% interest in Vodafone Spain was accounted for as an
associated undertaking within continuing operations under the equity accounting
method.
The operating results and net assets of Vodafone Ireland have been consolidated
from 14 May 2001. The Group’s interest in Iusacell has been accounted for as
an associated undertaking from 4 April 2001.
The Group’s interest in the J-Phone Group has been accounted for as an
associated undertaking up to 11 October 2001. The Group’s interest in Japan
Telecom has also been accounted for as an associated undertaking from 1 June
2001 to 11 October 2001. Prior to 1 June 2001, the Group’s interest in Japan
Telecom was accounted for as a fixed asset investment. The results and net
assets of Japan Telecom and the J-Phone Group were fully consolidated in the
Group’s financial statements with effect from 12 October 2001.