IFRS
Report on transition to International Financial Reporting Standards
Introduction and basis of preparation
This report provides an analysis of the key changes to Arriva plc consolidated reported results arising from the implementation of International Financial Reporting Standards ('IFRS'). IFRS in this document refers to standards that have been, or are expected to be, endorsed by the European Union and applicable for the year ending 31 December 2005. The group's first full year results under IFRS will be for the year ending 31 December 2005, with comparative results for 2004 also restated to IFRS where applicable. The transition date for conversion to IFRS is therefore 1 January 2004.
IFRS, together with established practice for interpreting the standards, is still evolving and therefore the impact on the financial statements of implementing IFRS may be subject to change.
The interim statement to 30 June 2005, announced concurrently with this report on 8 September 2005, has been prepared in accordance with the accounting policies that the group expects to apply in the 2005 year end financial statements. This report provides a narrative explanation and reconciliations between IFRS and previously reported financial information under UK GAAP as at 1 January 2004, 30 June 2004, and 31 December 2004.
Summary
The main impacts of IFRS on the group's reported results are shown below:
- an increase in profit before tax for the year ended 31 December 2004 of £10.9 million, principally the result of acquired goodwill no longer being amortised,
- basic earnings per share for the same period increases from 36.2 pence to 42.6 pence, principally the result of not amortising goodwill. Earnings per share, excluding goodwill impairment, intangible asset amortisation and exceptional items, increases marginally from 44.9 pence to 45.1 pence,
- net assets at 1 January 2004 decreased by £107.8 million,
mainly arising from:
- recognition of obligations in respect of defined benefit pension schemes (decrease £174.8 million), and a related intangible asset (increase £12.0 million),
- recognition of fair value of UK land and buildings as deemed cost (increase £24.6 million), elimination from liabilities of 2003 final dividend (increase £26.1 million),
- net debt decreases by £7.9 million at 30 June 2004 and by £3.4 million at 31 December 2004 due to the proportional consolidation of joint venture cash.
View the full report on transition to IFRS [PDF – 73KB]
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