Unilever 2012 Annual Report Download - page 143

140 Unilever Annual Report and Accounts 2012Financial statements
NOTES TO THE OMPANY AOUNTS UNILEVER PL
Accountng nformaton and polces
Bass of preparaton
The accounts have been prepared on the going concern basis
and in accordance with applicable United Kingdom accounting
standards and the UK Companies Act 2006.
The accounts are prepared under the historical cost convention
except for the revaluation of financial assets classified as
‘available-for-sale investments’ or ‘fair value through profit
orloss’, and ‘derivative financial instruments’ in accordance
withthe accounting policies set out below which have been
consistentlyapplied.
Accountng polces
The principal accounting policies are as follows:
Intangble assets
Intangible assets comprise trademarks purchased after
1January 1998 and are amortised in the profit and loss account
over their expected useful lives of up to a maximum of 20 years.
These assets are held at cost less accumulated amortisation.
They are subject to review for impairment in accordance with
United Kingdom Financial Reporting Standard 11 ‘Impairment
of Fixed Assets and Goodwill’ (FRS 11). Any impairment is
charged tothe profit and loss account as it arises.
Fxed nvestments
Shares in group companies are stated at cost less any amounts
written off to reflect a permanent impairment. Any impairment
ischarged to the profit and loss account as it arises.
Fnancal nstruments
The company’s accounting policies under United Kingdom
generallyaccepted accounting principles (UK GAAP), namely
FRS25 ‘Financial Instruments: Presentation’, FRS 26 ‘Financial
Instruments: Measurement’ and FRS 29 ‘Financial Instruments:
Disclosures’, are the same as the Unilever Group’s accounting
policies under International Financial Reporting Standards (IFRS)
namely IAS 32 ‘Financial Instruments: Presentation’, IAS 39
‘Financial Instruments: Recognition and Measurement’ and
IFRS7 ‘Financial Instruments: Disclosures’. Thepolicies are
set out under the heading ‘Capital and funding’ innote 15 to the
consolidated accounts on pages 112 and 115. PLC is taking the
exemption for financial instruments disclosures, because
IFRS 7 disclosures are given in notes 15 to 18 to the consolidated
accounts on pages 112 to 124.
Deferred taxaton
Full provision is made for deferred taxation on all significant
timing differences arising from the recognition of items for
taxation purposes in different periods from those in which they
are included in the company’s accounts. Full provision is made
at the rates of tax prevailing at the year end unless future rates
have been enacted or substantively enacted. Deferred tax assets
and liabilities have not been discounted.
Shares held by employee share trusts
Shares held to satisfy options are accounted for in accordance
with UKGAAP, namely FRS 25 ‘Financial Instruments:
Presentation’, FRS20‘Share Based Payments’ and Urgent Issues
Task Force abstract 38 ‘Accounting for ESOP Trusts’ (UITF 38).
All differences between thepurchase price of the shares held to
satisfy options granted and theproceeds received for the shares,
whether on exercise or lapse, arecharged to other reserves.
Dvdends
Under FRS 21 ‘Events after the Balance Sheet Date’, proposed
dividends do not meet the definition of a liability until such time
asthey have been approved by shareholders at the Annual
General Meeting. Therefore, we do not recognise a liability in
anyperiod for dividends that have been proposed but will not
be approved until after the balance sheet date. This holds for
externaldividends as well as intra-group dividends paid to
theparentcompany.
Provsons
Provisions are recognised where a legal or constructive obligation
exists at the balance sheet date, as a result of a past event, where
the amount of the obligation can be reliably estimated and where
the outflow of economic benefit is probable.