BT 2002 Annual Report Download - page 131

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I Differences between United Kingdom and United States generally accepted accounting principles continued
(n) Discontinued operations
Under UK GAAP, the disposal of certain lines of business and joint ventures and associates are shown as discontinued
activities. Under US GAAP, only the disposals of lines of business under Accounting Principles Board (APB) Opinion No. 30
would be reported as discontinued operations.
(o) Directories in progress
Under UK GAAP, the cost of classi®ed advertising directories in progress deferred in stock represents direct ®xed and
variable costs as well as directly attributable overhead costs. Under US GAAP, the deferred costs associated with
directories in progress comprise only the incremental direct costs associated with selling and creating the directories.
Directories in progress acquired in a business purchase are valued at replacement value under UK GAAP and at retail value
under US GAAP. Under UK GAAP, this difference is included in goodwill.
(p) Disposals of businesses
There are timing differences between UK GAAP and US GAAP for recognition of gains on the sale of certain businesses.
Foreign exchange movements taken to reserves under UK GAAP are reported in the income statement under US GAAP.
Historical GAAP differences on disposed businesses are also shown under this line item.
II Net income and shareholders' equity reconciliation statements
The following statements summarise the material estimated adjustments, gross of their tax effect, which reconcile net
income and shareholders' equity from that reported under UK GAAP to that which would have been reported had US GAAP
been applied.
Net income
Years ended 31 March
2002
£m
2001
£m
2000
£m
Net income (loss) applicable to shareholders under UK GAAP 995 (1,870) 1,995
Restatement for deferred tax under FRS 19 ±60 60
Net income (loss) applicable to shareholders under UK GAAP as previously reported 995 (1,810) 2,055
Adjustment for:
Sale and leaseback of properties (1,178) ± ±
Pension costs (106) (42) (209)
Redundancy charges (140) (453) (300)
Capitalisation of interest, net of related depreciation 398 348 (14)
Goodwill amortisation (34) (55) (64)
Mobile licences, software and other intangible asset capitalisation and
amortisation, net (32) (32) (33)
Financial instruments 23 (133) (129)
Deferred gain 313 (71) (19)
Impairment 192 ± ±
Employee share plans (8) (38) ±
Deferred taxation (1,409) 11 106
Directories in progress ±(82) ±
Disposals of businesses 254 ± ±
Net income (loss) as adjusted for US GAAP (732) (2,357) 1,393
Basic earnings (loss) per American Depositary Share as adjusted for US GAAP
a
£(0.88) £(3.24) £1.93
Diluted earnings (loss) per American Depositary Share as adjusted for US GAAP
a
£(0.88) £(3.24) £1.88
a
Each American Depositary Share is equivalent to 10 ordinary shares.
The adjustments to net income relating to discontinued operations are £282 million (2001 ± £276 million, 2000 ± £18 million
loss).
United States Generally Accepted Accounting Principles
130 BT Group Annual Report and Form 20-F 2002