Marks and Spencer 2006 Annual Report Download - page 94

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92 Marks and Spencer Group plc
Notes to the financial statements continued
33 ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS
As at As at
2 Apr 2005 3 Apr 2004
£m £m
Net assets and equity under UK GAAP 521.4 2,454.0
Adjustments (after taxation)
IFRS 1 – ‘Property Revaluation’ a376.2 378.5
IFRS 2 – ‘Share Schemes’ b9.8 6.2
IAS 10 – ‘Dividend Recognition’ c124.3 160.7
IAS 17 – ‘Leases’
Treatment of leasehold land d(72.4) (102.4)
Finance leases e(1.8) (1.7)
Lease incentives f(21.0) (17.2)
Fixed rental uplifts g(13.5) (10.3)
IAS 19 – ‘Employee Benefits’ h(27.2) (30.7)
IAS 38 – ‘Intangible Assets’
Software assets i13.0 22.7
Goodwill and brands j1.3 –
Other (0.9) (0.7)
Net assets and equity under IFRS 909.2 2,859.1
Year ended
2 Apr 2005
£m
Net income under UK GAAP 587.0
Adjustments (before taxation)
IFRS 1 – ‘Property Revaluation’ a1.1
IFRS 2 – ‘Share Schemes’ b(23.0)
IAS 17 – ‘Leases’
Treatment of leasehold land d29.9
Finance leases e(0.2)
Lease incentives f(5.1)
Fixed rental uplifts g(4.5)
IAS 19 – ‘Employee Benefits’ h5.3
IAS 38 – ‘Intangible Assets’
Software assets i1.4
Goodwill and brands j0.5
Other (0.1)
5.3
Taxation 4.6
Discontinued operations – software assets (10.7)
Net income under IFRS 586.2
a) IFRS 1 – ‘Property Revaluation’
Under UK GAAP, property was stated at historical cost, subject to certain properties having been revalued as at 31 March 1988.
A property revaluation was prepared on an existing use basis by external valuers DTZ Debenham Tie Leung as at 2 April 2004.
The Group has elected under IFRS 1 to reflect this valuation, in so far as it relates to freehold land and buildings, as deemed cost
on transition at 4 April 2004.
b) IFRS 2 – ‘Share Schemes’
The Group operates a range of share-based incentive schemes. Under UK GAAP, where shares (or rights to shares) were awarded
to employees, UITF 17 required that the charge to the profit and loss account should be based on the difference between the
market value of shares at the date of grant and the exercise price (i.e. an intrinsic value basis) spread over the performance period.
Save As You Earn (SAYE) schemes were exempt from this requirement and no charge was made. IFRS 2 requires that all shares or
options (including SAYE) awarded to employees as remuneration should be measured at fair value at grant date, using an option
pricing model, and charged against profits over the period between grant date and vesting date, being the vesting period. This
treatment has been applied to all awards granted but not fully vested at the date of transition.