Experian 2010 Annual Report Download - page 155

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153
Introduction
2 – 11
Business review
12 – 51
Governance
52 – 84
Financial statements
85 – 160
B. Basis of preparation and signicant accounting policies (continued)
Accounting for derivative nancial instruments
The Company uses forward foreign exchange contracts to manage its exposures to uctuations in foreign exchange rates. The
interest differential reected in forward foreign exchange contracts is taken to interest. Forward foreign exchange contracts are
recognised at fair value, based on forward foreign exchange market rates at the balance sheet date. Gains or losses on forward
foreign exchange contracts are taken directly to net foreign exchange gains or losses in the prot and loss account.
Deferred tax
Deferred tax is provided in respect of timing differences that have originated but not reversed at the balance sheet date and
is determined using the tax rates that are expected to apply when the timing differences reverse. Deferred tax assets are
recognised only to the extent that they are expected to be recoverable.
Own shares
The Group has a number of equity settled, share-based employee incentive plans and, in connection with these plans, shares in
the Company are held by The Experian plc Employee Share Trust and the Experian UK Approved All-Employee Share Plan. The
assets, liabilities and expenses of these separately administered trusts are included in the Company’s nancial statements as if
they were the Company’s own. The assets of the trusts mainly comprise shares in the Company and such shares are shown as a
deduction from total shareholders’ funds at cost.
Share-based payments
The Group’s equity settled, share-based employee incentive plans include options and awards in respect of shares in the
Company made at or after demerger in October 2006 together with options and awards previously granted in respect of shares in
GUS plc which were rolled over into options and awards in respect of shares in the Company at demerger.
The fair value of such options and awards granted to employees of the Company is recognised after taking into account the
Company’s best estimate of the number of options and awards expected to vest. The Company revises the vesting estimate at
each balance sheet date and non-market performance conditions are included in the vesting estimates. Amounts are recognised
over the vesting period. Fair value is measured at the date of grant using whichever of the Black-Scholes model, Monte Carlo
model and closing market price is most appropriate to the award. Market based performance conditions are included in the fair
value measurement on grant date and are not revised for actual performance.
The fair value of share incentives issued by the Company to employees of subsidiary undertakings is accounted for as a capital
contribution and recognised as an increase in the Company’s investment in group undertakings with a corresponding increase in
total shareholders’ funds.
C. Operating loss
Operating loss is stated after charging:
(i) Staff costs 2010
US$m
2009
(Represented)
(Note B)
US$m
Directors’ fees 1.8 1.6
Wages and salaries 1.0 1.1
2.8 2.7
Executive directors of the Company are employed by subsidiary undertakings and details of the remuneration of all directors are
given in the audited part of the report on directors’ remuneration. The Company had two (2009: two) employees throughout the
year.
(ii) Fees payable to the Company’s auditor and its associates 2010
US$m
2009
(Represented)
(Note B)
US$m
Audit of the Group nancial statements 0.4 0.4
Audit of the Company nancial statements 0.1 0.1
Other services --
0.5 0.5