BT 2000 Annual Report Download - page 42

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Annual report and Form 20-F 41
shareholders' equity at 31 March 2000 and 1999 under US
Generally Accepted Accounting Principles (US GAAP) are
shown on page 105. Di¡erences between UK GAAP and US
GAAP include results of the di¡ering accounting treatment
of pension costs, redundancy costs, intangible assets,
goodwill, deferred taxation, capitalisation of interest,
¢nancial instruments, contributing assets to joint ventures
and dividends. Cash £ow information under the US GAAP
presentation is also shown on page 106.
In its US GAAP reconciliation statement for the 2002
¢nancial year, BT expects to adopt SFAS No. 133 on
accounting for derivative instruments and hedging
activities. Under this standard, derivative instruments are
required to be included in the balance sheet at fair value
and certain changes in these fair values need to be
recognised in the income statement. The impact of
implementing this standard will be determined by market
conditions after implementation and the ability to
treat derivative instruments as hedges in accordance with
the standard. Gross cumulative gains and losses on
¢nancial instruments treated as hedges under US GAAP at
31 March 2000 were »96 million and »46 million,
respectively.
In December 1999, the Securities and Exchange
Commission (SEC) issued Sta¡ Accounting Bulletin No. 101
(SAB 101), ``Revenue Recognition in Financial Statements'',
which BT is required to adopt in its US GAAP
reconciliation statements by 30 June 2000. SAB 101
provides additional guidance on revenue recognition as
well as criteria for when revenue is generally realised and
earned. We are currently assessing the impact of SAB 101
on the US GAAP reconciliations.