Twenty-First Century Fox 2004 Annual Report Download - page 81

Note 12 International Financial Reporting Standards
For reporting periods beginning on or after 1 January, 2005, all entities preparing general purpose financial reports under
the Corporations Act 2001 will be required to adopt Australian equivalents to International Financial Reporting Standards
(“IFRS”). Presently, the adoption of IFRS would be first reflected in the Group’s financial statements for the half-year
ending 31 December, 2005 and year ending 30 June, 2006. The extent of the impact of IFRS on the Group’s financial reporting
requirements will be impacted by the outcome of plans to change the Company’s place of incorporation to the United
States by the end of calendar 2004 (refer Note 10).
Adoption of IFRS could have a material impact on the Group’s financial position and reported financial performance.
Whilst it is not possible to quantify the impact of adopting IFRS at this time, key differences in accounting policies that
are expected to arise from adopting Australian equivalents to IFRS are as follows:
Intangible assets
Prior to 30 June, 1991, certain Publishing rights, titles and television licences were revalued in excess of cost based on their
fair values as determined by directors. In addition, certain amounts recorded within Publishing rights, titles and
television licences have been recognised other than through acquisition. On transition to IFRS, these amounts would be
required to be derecognised against opening retained earnings.
Income tax
The Group currently applies an income statement approach for tax effect accounting. IFRS requires a balance sheet
approach under which temporary differences are identified for each asset and liability rather than accounting for the
effects of timing and permanent differences between taxable income and accounting profit. Deferred taxes for fair value
adjustments arising from business combinations will need to be provided and will affect the determination of goodwill on
future acquisitions.
Employee benefits
Under IFRS, the Group will be required to recognise the net surplus or deficit between plan assets and accrued benefits in
its sponsored defined benefit superannuation plans in the Statement of Financial Position with movements in the net
position of each plan recognised in the Statement of Financial Performance each year. Currently, the Group recognises
pension costs at the required level of contributions made or an actuarially determined amount.
In addition, a remuneration expense will be recognised for share-based compensation provided to employees in respect of
services rendered. No cost is currently recorded for options issued to employees under the Group’s various share option
arrangements.
Investments
Non-associate investments are currently recorded at cost. Under IFRS, such investments are to be carried at fair value with
changes in value recorded as a movement in equity, unless fair value cannot be reliably determined.
Financial instruments
There is no existing Australian standard dealing with the recognition and measurement of financial instruments. Under
IFRS, certain derivatives and embedded derivative contracts will be required to be recorded at fair value with changes in
value being recorded through the profit and loss.
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NEWS CORPORATION CONCISE REPORT 2004
Notes to and forming part of the Concise Financial Report
(continued)
for the year ended 30 June, 2004