BT 2001 Annual Report Download - page 128

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VI Current asset investments
Under US GAAP, investments in debt securities would be classi¢ed as either trading, available-for-sale or held-to-maturity.
Trading investments would be stated at fair values and the unrealised gains and losses would be included in income. Securities
classi¢ed as available-for-sale would be stated at fair values, with unrealised gains and losses, net of deferred taxes, reported in
shareholders’ equity. Debt securities classi¢ed as held-to-maturity would be stated at amortised cost. The following analyses do
not include securities with original maturities of less than three months.
At 31 March 2001, the group held trading investments (as de¢ned by US GAAP) at a carrying amount of »390 million
(2000 --- »866 million) with fair values totalling »394 million (2000 --- »873 million). Held-to-maturity securities at 31 March 2000
and 2001 consisted of the following:
Amortised
cost
£m
Estimated
fair value
£m
UK Government securities and other UK listed investments 8 8
Commercial paper, medium-term notes and other investments 30 30
Total at 31 March 2001 38 38
UK Government securities and other UK listed investments 15 15
Commercial paper, medium-term notes and other investments 168 168
Total at 31 March 2000 183 183
The contractual maturities of the held-to-maturity debt securities at 31 March 2001 were as follows:
Cost
£m
Fair value
£m
Maturing on or before 31 March 2002 38 38
Maturing after 31 March 2002 ––
Total at 31 March 2001 38 38
VII Pension costs
The following position for the main pension scheme is computed in accordance with US GAAP pension accounting rules under
SFAS No. 87 and SFAS No. 88, the e¡ect of which is shown in the above reconciliation statements.
The pension cost determined under SFAS No. 87 was calculated by reference to an expected long-term rate of return on
scheme assets of 6.25% (2000 --- 6.5%, 1999 --- 7.7%). The components of the pension cost for the main pension scheme comprised:
2001
£m
2000
£m
1999
£m
Service cost 580 498 387
Interest cost 1,673 1,459 1,653
Expected return on scheme assets (1,850) (1,600) (1,712)
Amortisation of prior service costs 24 24 24
Amortisation of net obligation at date of limited application of SFAS No. 87 52 52 52
Recognised gains (133) (65) (137)
Additional cost of termination benefits 349 263 279
Pension cost for the year under US GAAP 695 631 546
United States Generally Accepted Accounting Principles
128 BT Annual report and Form 20-F