Unilever 1999 Annual Report Download - page 55

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Additional information for United States investors
Unilever Group
The following is a summary of the more important differences between Unilever’s accounting principles and US GAAP.
Goodwill and other intangibles
Prior to 1 January 1998 Unilever wrote off goodwill and all
other intangible assets arising on the acquisition of new
interests in group companies and joint ventures directly to
profit retained in the year of acquisition. Under US GAAP,
goodwill and identifiable intangibles, principally trade
marks, are capitalised and amortised against income over
their estimated useful lives, not exceeding 40 years.
There is no difference between the accounting policy
applied to goodwill and intangible assets purchased after
1 January 1998 and US GAAP.
Restructuring costs
Under Unilever’s accounting policy certain restructuring
costs are recognised when a restructuring plan has been
announced. Under US GAAP, certain additional criteria must
be met before such charges are recognised.
Interest
Unilever treats all interest costs as a charge to the profit and
loss account in the current period. Under US GAAP interest
incurred during the construction periods of tangible fixed
assets is capitalised and depreciated over the life of the
assets.
Pensions
Under Unilever’s accounting policy the expected costs of
providing retirement pensions are charged to the profit and
loss account over the periods benefiting from the
employees’ services. Variations from expected cost are
similarly spread. Under US GAAP, pension costs are also
spread, but based on prescribed actuarial assumptions.
Dividends
The proposed final ordinary dividends are provided for in the
Unilever accounts in the financial year in the year to which
they relate. Under US GAAP such dividends are not provided
for until they become irrevocable.
55 Additional Financial Information