Thank you, Nik, for this very thorough
answer. That really explains a lot.
I am not an accountant, so I was confused by
these accounting issues of large profits and
losses...
Interesting.
Gerhard
Frengle, Nik, VF-JP wrote:
> Gerhard,
> As I mentioned in a private mail to you, the loss is a pro-forma loss, and this loss was actually reversed into a profit when Vodafone switched to different accounting rules. Below is a story from accountingnet.ie which explains in language that I think even those of us without PhDs in physics can understand:
>
> By S Heaphy
> Jan 24, 2005
>
> The adoption of international financial reporting standards by UK mobile phone giant Vodafone will lead to a £6.8bn boost in reported profit according to reports released by the company.
>
> For the six months ended 30 September 2004 the impact of the adoption of IFRS is to increase profit attributable to equity shareholders by £6.8 billion comprising a credit of £7.3 billion in relation to the cessation of goodwill amortisation, a £0.3 billion reduction in non-recurring tax income and a net charge of £0.2 billion in relation to other adjustments".
>
> The primary changes to Vodafone's reported financial information from the adoption of IFRS are as a result of the:
> * requirement not to amortise goodwill;
> * proportionate consolidation for certain Group interests, most notably Vodafone Italy, resulting from their reclassification as joint ventures;
> * requirement to amortise mobile licences on a straight line basis;
> * recognition of deferred tax liabilities on a different basis;
> * inclusion of a fair value charge in relation to employee share options;
> * recognition of all employee benefit related assets and obligations, principally pensions; and
> * recognition of certain financial instruments at fair value and the reclassification of preference shares as debt.
[ excessive quoting removed by moderator ]
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Gerhard Fasol, PhD Eurotechnology Japan K. K.
fasol_at_eurotechnology.com http://www.eurotechnology.com/
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Received on Tue Feb 22 14:07:25 2005