Telstra 2005 Annual Report Download - page 55

www.telstra.com.au/abouttelstra/investor 53
statement of changes in shareholders’ equity
Telstra Group Reserves
Asset Foreign Consoli- Outside
Contributed revaluation currency General dation Retained equity
equity (i) translation(ii) (iii) fair value(iv) profits interests Total
$m $m $m $m $m $m $m $m
Balance at 30 June 2003 6,433 32 (240) 8 50 9,137 2 15,422
– change in outside equity interests’ capital,
reserves and accumulated losses (apart from
interest in net loss) – – – – – – 1 1
– net profit/(loss) – – – – – 4,118 (1) 4,117
– reserves recognised on equity accounting our
interest in joint venture entities and
associated entities – – (5) – – – – (5)
– adjustments on translation of financial
statements of non-Australian controlled entities – – 21 – – – – 21
– fair value adjustment on acquisition of
controlling interest in joint venture entity – – – – (6) 6 – –
– transfer of foreign currency translation reserve
and general reserve on sale of controlled entities
and associates – – 38 (3) – (35) – –
– share buy-back (v) (360) – – – – (649) – (1,009)
– dividends (note 3) – – – – – (3,186) – (3,186)
Balance at 30 June 2004 6,073 32 (186) 5 44 9,391 2 15,361
– net profit – – – – – 4,447 – 4,447
– reserves recognised on equity accounting our
interest in joint venture entities and
associated entities – – (2) 5 – – – 3
– adjustments on translation of financial
statements of non-Australian controlled entities – – (43) – – – – (43)
– fair value adjustment on acquisition of
controlling interest in joint venture entity – – – – (6) 6 – –
– transfer of general reserve on sale of associates – – – (6) – 6 – –
– share buy-back (v) (280) – – – – (476) – (756)
– dividends (note 3) – – – – – (4,131) – (4,131)
Balance at 30 June 2005 5,793 32 (231) 4 38 9,243 2 14,881
(i) The asset revaluation reserve was previously used to record changes in the value of non current assets. Under AASB 1041:‘Revaluation of Non-Current Assets’, we previously deemed the
carrying value of our property, plant and equipment assets to be cost.As a result, the asset revaluation reserve may no longer be used to record the writedowns of these assets to
recoverable amount. Any writedowns of these assets to recoverable amount must be made through the statement of financial performance.
As a consequence of applying the cost method of accounting, we have discontinued our policy of revaluing property, plant and equipment upwards. The asset revaluation reserve can no
longer be used for distribution to shareholders or for offsetting revaluation decrements due to legal and accounting restrictions.
(ii) The foreign currency translation reserve is used to record exchange differences arising from the conversion of the financial statements of our self sustaining non-Australian operations into
Australian dollars. Conversion of operations where entities operate on their own are taken to the foreign currency translation reserve, while conversion of those entities that operate with
us are taken to the statement of financial performance.
This reserve is also used to record our percentage share of exchange differences arising from equity accounting our non-Australian investments in joint venture entities and associated
entities.
(iii) The general reserve represents our share of the capital reserve of joint venture entities and associated entities as a result of equity accounting.
(iv) The consolidation fair value reserve represents our share of the fair value adjustments to TelstraClear Limited net assets upon acquisition of a controlling interest. The reserve balance is
amortised over the useful life of the underlying revalued assets (average of 18 years).
(v) On 15 November 2004, we completed an off-market share buy-back of 185,284,669 ordinary shares as part of our ongoing capital management program. During fiscal 2004, we also
completed an off-market share buy-back of 238,241,174 ordinary shares.