BT 2016 Annual Report Download - page 217

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Overview The Strategic Report Governance Financial statements Additional information
Financial statements of BT Group plc
BT Group plc accounting policies
Accounting basis
As used in these financial statements and associated notes, the
term ‘company’ refers to BT Group plc. These separate financial
statements of the company are prepared in accordance with and
presented as required by the Companies Act 2006. For all periods
up to and including the year ended 31 March 2015, the Company
prepared its separate financial statements in accordance with UK
GAAP (United Kingdom Generally Accepted Accounting Practice).
The Company meets the definition of a qualifying entity under
Financial Reporting Standard 100 (FRS 100). Accordingly, in the
year ended 31 March 2016 the company has undergone transition
from reporting under previous UK GAAP to Financial Reporting
Standard 101 (FRS 101) ‘Reduced Disclosure Framework’. These
financial statements have been prepared in accordance with
FRS101.
Previous UK GAAP differs in certain respects from FRS 101 and
comparative information has been re‑presented as necessary in
accordance with FRS 101. There were no measurement differences
on transition from UK GAAP to FRS 101 and therefore no opening
reconciliation of Equity is presented.
FRS 101 incorporates, with limited amendments, International
Financial Reporting Standards (IFRS).
As permitted by FRS 101, the company has taken advantage of
the disclosure exemptions available under that standard in relation
to business combinations, share‑based payments, non‑current
assets held for sale, financial instruments, capital management,
and presentation of comparative information in respect of certain
assets, presentation of a cash flow statement, standards not yet
effective, impairment of assets and related party transactions.
The company intends to continue to take advantage of these
exemptions in future years. Further detail is provided below.
Where required, equivalent disclosures have been given in the
consolidated financial statements of BT Group plc.
IFRS 1
‘ First Time Adoption of International Financial Reporting
Standards’ requires an entity to develop policies based on the
standards and related interpretations effective at the reporting
date of its first annual IFRS financial statements. IFRS 1 also
requires that those policies be applied as of the transition date to
IFRS (which for BT Group plc is 1 April 2014) and throughout all
periods presented in the first IFRS financial statements.
As required by FRS 101, BT Group plc notified its shareholders of
the proposed change at the Annual General Meeting in July 2014.
Financial statements
The financial statements are prepared on a going concern basis and
under the historical cost convention as modified by the revaluation
of certain financial instruments at fair value.
As permitted by Section 408(3) of the Companies Act 2006,
the company’s profit and loss account has not been presented.
Exemptions
The BT Group plc consolidated financial statements for the
year ended 31 March 2016 contain a consolidated cash flow
statement. Consequently, as permitted by IAS 7 ‘Statement of Cash
flow’, the company has not presented its own cash flow statement.
The BT Group plc consolidated financial statements for the year
ended 31 March 2016 contain related party disclosures.
Consequently, the company has taken advantage of the exemption
in IAS 24, ‘Related Party Disclosures’ not to disclose transactions
with other members of the BT Group.
The BT Group plc consolidated financial statements for the year
ended 31 March 2016 contain financial instrument disclosures
which comply with IFRS 7, ‘Financial Instruments: Disclosures’.
Consequently, the company is exempt from the disclosure
requirements of IFRS 7 in respect of its financial instruments.
Investments in subsidiary undertakings
Investments in subsidiary undertakings are stated at cost and
reviewed for impairment if there are indicators that the carrying
value may not be recoverable.
Taxation
Full provision is made for deferred taxation on all temporary
differences which have arisen but not reversed at the balance
sheet date. Deferred tax assets are recognised to the extent that
itis regarded as more likely than not that there will be sufficient
taxable profits from which the underlying timing differences can be
deducted. The deferred tax balances are not discounted.
Dividends
Dividend distributions are recognised as a liability in the year in
which the dividends are approved by the company’s shareholders.
Interim dividends are recognised when they are paid; final dividends
when authorised in general meetings by shareholders.
Share capital
Ordinary shares are classified as equity. Repurchased shares of the
company are recorded in the balance sheet as part of Own shares
and presented as a deduction from shareholders’ equity at cost.
Cash
Cash includes cash in hand and bank deposits repayable on
demand.
Share-based payments
The company does not incur a charge for share‑based payments.
However, the issuance by the company of share options and
awards to employees of its subsidiaries represents additional capital
contributions to its subsidiaries. An addition to the company’s
investment in subsidiaries is recorded with a corresponding increase
in equity shareholders’ funds. The additional capital contribution
is determined based on the fair value of options and awards at the
date of grant and is recognised over the vesting period.
New and amended accounting standards that have been issued but are
not yet effective
There are no standards or interpretations issued but not yet
effective which are expected to have a material impact on the
company.