9th Aug 2005 15:41
Lookers PLC09 August 2005 9 August 2005 Lookers plc International Financial Reporting Standards (IFRS) In advance of releasing its interim results on 5 September 2005, Lookers plctoday announces the impact of complying with IFRS by restating its comparativesfor the half-year ended 30 June 2004, and the year ended 31 December 2004. Enquiries Lookers plc Ken Surgenor - Chief Executive 0161 291 0043 David Dyson - Finance Director 0161 291 0043 Hudson Sandler James Hill 020 7796 4133 LOOKERS plcReconciliation of UK GAAP to IFRS GAAP (unaudited) Profit after tax Net Assets Note June 04 Dec 04 June 04 Dec 04 £million £million £million £million Under UK GAAP 18.5 18.8 87.9 85.7 Dividends - accounted for in period declaredor proposed (a) - - 1.4 2.9 Revaluation of property (b) - -0.1 11.5 11.5 Deferred tax - provide for revaluations androllover relief (b) 0.3 0.2 -2.6 -2.7 Pensions - incorporation of deficit onbalance sheet and elimination of SSAP 24prepayment (c) -0.4 -0.7 -10.9 -14.2 Amortisation of intangible assets (d) - -0.1 - -0.1 Goodwill - amortisation no longer permitted (e) 0.5 1.2 0.5 1.2 Under IFRS GAAP 18.9 19.3 87.8 84.3 Notes (a) Under UK Company law, companies were required to provide for their finaldividend in their closing balance sheet and in advance of the dividend beingdeclared and approved by the Annual General Meeting. Under IAS 10 the dividendcannot be provided in the year end balance sheet as, at that date, the dividenddid not represent a liability. At 31 December 2004 accrued dividends of£2,864,000 were removed from other liabilities. At June 2004 the accruedinterim dividends of £1,408,000 were similarly removed from other liabilities. (b) The Group has decided to adopt the cost model under IAS 16. IFRS 1 includes anexemption allowing fair value to be used as deemed cost at the date oftransition. Certain of the Group's properties were revalued on 31 December2003, but this revaluation was not included in the UK GAAP accounts. The basisof the revaluation, being open market value was, in the opinion of theDirectors, approximate to fair value and has been adopted as deemed cost ontransition to IFRS. Therefore, at 31 December 2003, net assets were increasedby £11,585,000 and the depreciation charge for the year to 31 December 2004 wasincreased by £129,000. An amount of £2,701,000 was transferred to deferred taxliability relating to the revaluation. (c) The Group previously accounted for its participation in the Lookers PensionPlan, a Group wide defined benefit scheme, under SSAP 24. On adoption of IAS19, the pension prepayment and related deferred taxation are no longer required.At 31 December 2004 an amount of £1,586,000 being the SSAP 24 prepayment netof deferred tax was written off (June 2004: £1,168,000). Under IAS 19, retirement benefit liabilities are presented gross on the balancesheet. At 31 December 2004 a liability of £18,051,000 has been providedtogether with an associated deferred tax asset of £5,415,000 (June 2004:£13,900,000 and £4,170,000 respectively). (d) Under IAS 38, intangible assets acquired as part of a business combination arerequired to be separately identified from goodwill. In August 2004 the Groupacquired FPS, which gave rise to such intangible assets. As a result,£13,616,000 was reclassified from goodwill to intangible assets. Of thisbalance, £113,000 after tax had been amortised by 31 December 2004. (e) Under IFRS 3 Goodwill is not amortised but instead must be tested for impairmentat least annually. Opening Goodwill at 1 January 2004 was £10,605,000.Goodwill of £1,227,000 previously amortised in the year to 31 December 2004 hasbeen reversed (June 2004: £475,000) (f) In accordance with IAS 39, derivatives held by an entity have to be carried atfair value with movements in the fair value being taken to the income statement.At 30 June 2004 and 31 December 2004, the Group had a number of interest rateswaps and an interest rate collar in place, but the net fair value of these wasinsignificant. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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