Marks and Spencer 2007 Annual Report Download - page 57

Notes to the financial statements
1
1 AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS
BBaassiiss ooff pprreeppaarraattiioonn
The financial statements have been prepared in accordance
with International Financial Reporting Standards (‘IFRS’) as
adopted by the European Union and with those parts of the
Companies Act 1985 applicable to companies reporting
under IFRS.
Following a change in external interpretation of IAS 12 – ‘Income
Taxes’ the Group’s accounting policy for deferred tax now more
closely reflects the manner in which management expects to
recover or settle the carrying amounts of its buildings through
sale or use. The opening balance sheet at 3 April 2005 has
been restated to recognise £48.4m of additional deferred tax
assets and reserves. There is no material impact of this change
on the income statement.
The following IFRSs and amendments have been issued by the
International Accounting Standards Board but none is expected
to have a material impact on the results or net assets of the
Group.
Amendment to IAS 1 – ‘Presentation of Financial Statements –
Capital Disclosures’ was issued in August 2005. It introduces
new requirements for capital disclosures. It is required to be
implemented by the Group from 1 April 2007, and will have
no impact on the results or net assets of the Group.
IFRS 7 – ‘Financial Instruments: Disclosures’ was issued in
August 2005. It replaces IAS 32 – ‘Financial Instruments:
Disclosure and Presentation’ with revised and additional
disclosures. It is required to be implemented by the Group from
1 April 2007, and will have no impact on the results or net
assets of the Group.
IFRS 8 – ‘Operating Segments’ was issued in November 2006.
It replaces IAS 14 – ‘Segmental Reporting’ and requires
operating segments to be disclosed on the same basis as that
used for internal reporting. It is required to be implemented by
the Group from 1 April 2009, and will have no impact on the
results or net assets of the Group.
Amendment to IAS 23 – ‘Borrowing Costs’ was issued in March
2007. It removes the option of immediately expensing borrowing
costs that are directly attributable to a qualifying asset and
requires such costs to be capitalised. It is required to be
implemented by the Group from 1 April 2009 but is not
expected to have a material impact on the results or net
assets of the Group.
Marks and Spencer Scottish Limited Partnership has taken
exemption under paragraph 7 of the Partnership and Unlimited
Companies (Accounts) Regulations 1993 (SI 1993/1820) from
the requirement to prepare and deliver accounts in accordance
with the Companies Act.
A summary of the Company’s and the Group’s accounting
policies is given below:
A
Accccoouunnttiinngg ccoonnvveennttiioonn
The financial statements are drawn up on the historical cost
basis of accounting, except as disclosed in the accounting
policies set out below.
B
Baassiiss ooff c
coonnssoolliiddaattiioonn
The Group financial statements incorporate the financial
statements of Marks and Spencer Group plc and all its
subsidiaries made up to the year end date. Where necessary,
adjustments are made to the financial statements of subsidiaries
to bring the accounting policies used into line with those used
by the Group.
Subsidiary undertakings are all entities over which the Group
has the power to govern the financial and operating policies
generally accompanying a shareholding of more than one half
of the voting rights. Subsidiary undertakings acquired during the
year are recorded using the acquisition method of accounting
and their results included from the date of acquisition.
The separable net assets, both tangible and intangible of the
newly acquired subsidiary undertakings are incorporated into
the financial statements on the basis of the fair value as at the
effective date of control.
Results of subsidiary undertakings disposed of during the
financial year are included in the financial statements up to
the effective date of disposal. Where a business component
representing a separate major line of business is disposed of,
or classified as held for sale, it is classified as a discontinued
operation. The post-tax profit or loss of the discontinued
operation is shown as a single amount on the face of the
income statement, separate from the other results of the Group.
Intercompany transactions, balances and unrealised gains on
transactions between Group companies are eliminated.
R
Reevveennuuee
Revenue comprises sales of goods to customers outside the
Group less an appropriate deduction for actual and expected
returns, discounts and loyalty scheme voucher costs, and is
stated net of Value Added Tax and other sales taxes. Sales of
furniture are recorded on delivery to the customer.
D
Diivviiddeennddss
Final dividends are recorded in the financial statements in the
period in which they are approved by the Company’s
shareholders. Interim dividends are recorded in the period in
which they are approved and paid.
PPeennssiioonnss
Funded pension plans are in place for the Group’s UK
employees and the majority of employees overseas. The assets
of these pension plans include a property partnership interest
and various equities and bonds. The equities and bonds are
managed by third-party investment managers and are held
separately in trust.
wwwwww..mmaarrkkssaannddssppeenncceerr..ccoomm//aannnnuuaallrreeppoorrtt22000077MARKS AND SPENCER GROUP PLC 5555
Executive Team Your Board Financial
Review Governance Financials
Shareholder Information