Peachtree 2015 Annual Report Download - page 123

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The Sage Group plc | Annual Report & Accounts 2015 121
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
3.5 Finance income and costs
Accounting policy
Finance income and costs are recognised using the effective interest method. Finance costs are recognised in the income statement
simultaneously with the recognition of an increase in a liability or the reduction in an asset.
2015
£m
2014
£m
Finance income: interest income on short-term deposits 2.2 2.1
Finance costs:
Finance costs on bank borrowings (3.6) (4.6)
Finance costs on US senior loan notes (18.7) (16.4)
Amortisation of issue costs (1.3) (1.2)
Imputed interest on put and call arrangement to acquire non-controlling interest and deferred consideration –(0.8)
Finance costs (23.6) (23.0)
Finance costs – net (21.4) (20.9)
3.6 Adjustments between underlying and statutory results
Accounting policy
The business is managed and measured on a day to day basis using underlying results. To arrive at underlying results, certain
adjustments are made for items that are individually important and which could, if included, distort the understanding of the
performance for the year and the comparability between periods.
Management apply judgement in determining which items should be excluded from underlying performance.
Recurring items
These are items which occur regularly but which management judge to have a distorting effect on the underlying results of the Group.
These items relate mainly, although not restricted to, fair value adjustments on financial instruments, and merger & acquisition (“M&A”)
activity which by its nature is irregular in its impact and includes amortisation, and acquisition related costs. These do not include
operating or integration costs related to the acquisition. Recurring items are adjusted each year irrespective of materiality to ensure
consistent treatment.
Non-recurring items
These items are those items which are non-recurring nature and are identified by virtue of either their size or nature. These items
can include, but are not restricted to, gains and losses on the disposal of assets, impairment charges and reversals and restructuring.
These are items which management judge to be of a one-off nature or non-operational, which would distort a reader of the Company’s
accounts understanding of underlying business performance.