Vodafone 2014 Annual Report Download - page 109

For the purpose of presenting consolidated nancial statements, the assets and liabilities of entities with a functional currency other than sterling
are expressed in sterling using exchange rates prevailing at the reporting period date. Income and expense items and cash ows are translated
at the average exchange rates for the period and exchange differences arising are recognised directly in equity. On disposal of a foreign entity,
the cumulative amount previously recognised in equity relating to that particular foreign operation is recognised in prot or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and
translated accordingly.
In respect of all foreign operations, any exchange differences that have arisen before 1 April 2004, the date of transition to IFRS, are deemed to be nil
and will be excluded from the determination of any subsequent prot or loss on disposal.
The net foreign exchange loss recognised in the consolidated income statement for the year ended 31 March 2014 is £1,688 million (31 March
2013: £117 million loss; 2012: £703 million gain). The net losses and net gains are recorded within operating prot (2014: £16 million charge;
2013: £21 million charge; 2012: £33 million charge), other income and expense and non-operating income and expense (2014: £1,493 million
charge; 2013: £1 million charge; 2012: £681 million credit), investment and nancing income (2014: £180 million charge; 2013: £91 million charge;
2012: £55 million credit) and income tax expense (2014: £1 million credit; 2013: £4 million charge; 2012: £nil). The foreign exchange gains and losses
included within other income and expense and non-operating income and expense arise on the disposal of interests in joint ventures, associates and
investments from the recycling of foreign exchange gains previously recorded in the consolidated statement of comprehensive income.
New accounting pronouncements adopted
On 1 April 2013 the Group adopted new accounting policies where necessary to comply with amendments to IFRS. Accounting pronouncements
considered by the Group as signicant on adoption are:
a Amendments to IAS 19, “Employee benets”, which requires revised accounting and disclosures for dened benet pension schemes, including
a different measurement basis for asset returns, replacing the expected return on plan assets and interest cost currently recorded in the consolidated
income statement with net interest. This results in a revised allocation of costs between the income statement and other comprehensive
income. The amendments also include a revised denition of short- and long-term benets to employees and revised criteria for the recognition
of termination benets. The consolidated nancial statements have been restated on the adoption of the amendments to IAS 19 (2013: reduced
prot for the year by £16 million, 2012: £9 million).
a Changes to the standards governing the accounting for subsidiaries, joint arrangements and associates, including the introduction of IFRS 10,
“Consolidated Financial Statements”, IFRS 11, “Joint Arrangements” and IFRS 12, “Disclosure of Interests in Other Entities” and amendments
to IAS 28, “Investments in Associates and Joint Ventures”. IFRS 11 generally requires interests in jointly controlled entities to be recorded using the
equity method, which is consistent with the accounting treatment applied to investments in associates. Under IFRS 11, the Group’s principal joint
arrangements, excluding Cornerstone Telecommunications Infrastructure Limited (see note 12 “Investments in associates and joint ventures”,
are incorporated into the consolidated nancial statements using the equity method of accounting rather than proportionate consolidation.
The consolidated nancial statements have been restated on the adoption of IFRS 11; the other changes to the standards governing the
accounting for subsidiaries, joint arrangements and associates do not have a material impact on the Group. Adoption on 1 April 2013 is considered
to be early adoption for the purposes of complying with IFRS as endorsed by the European Union.
In addition, during the year the Group has early-adopted amendments to IAS 36, “Impairment of Assets”, relating to recoverable amounts
disclosures, which corrects a previous amendment.
Other IFRS changes adopted on 1 April 2013, including the adoption of IFRS 13, “Fair Value Measurement”, have no material impact on the
consolidated results, nancial position or cash ows of the Group.
The previously reported comparative periods have been restated in the consolidated nancial statements for the amendments to IAS 19 and
IFRS 11. The impact on key nancial information is detailed in the following tables; the impact on earnings per share is immaterial.
2013 2012
As reported
£m
Adjustments
£m
Discontinued
operations1
£m
Restated
£m
As reported
£m
Adjustments
£m
Discontinued
operations1
£m
Restated
£m
Consolidated income statement and statement
of comprehensive income
Revenue 44,445 (6,404) – 38,041 46,417 (7,596) – 38,821
Gross prot 13,940 (2,466) – 11,474 14,871 (3,251) – 11,620
Share of results of equity accounted associates and joint
ventures 6,477 520 (6,422) 575 4,963 1,033 (4,867) 1,129
Operating prot/(loss) 4,728 (508) (6,422) (2,202) 11,187 (702) (4,867) 5,618
Prot/(loss) before tax 3,255 (372) (6,366) (3,483) 9,549 (561) (4,844) 4,144
Prot/(loss) for the nancial year from continuing
operations 673 (16) (4,616) (3,959) 7,003 (9) (3,555) 3,439
Prot for the nancial year from discontinued operations – – 4,616 4,616 – – 3,555 3,555
Other comprehensive income/(expense) 76 16 – 92 (4,653) 9 – (4,644)
Total comprehensive income 749 – – 749 2,350 – – 2,350
Note:
1 Adjustments to disclose discontinued operations as a result of the disposal of the US Group, whose principal asset was its 45% interest in Verizon Wireless . See note 7 “Discontinued operations” for fur ther detail s.
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