The main adjustments in changing to IFRS, including the amendment to IAS21, were as follows:
| ||UK GAAP|
|Shareholders funds 1 January 2004||4,361||(493)|| ||585|| ||(66)||4,387|
|Shareholders funds 31 December 2004||5,220||(237)||473||617|| ||(154)||5,919|
|Year ended 31 December 2004|| || || || || || || |
|Profit from operations||1,794||59||454|| ||1,323||130||3,760|
|Profit for the year (before minority interests)||1,224||29||491|| ||1,132||88||2,964|
|Earnings per share|| || || || || || || |
|Basic||55.20p|| || || || || ||133.76p|
|Adjusted diluted||75.83p|| || || || || ||76.62p|
- All cumulative actuarial gains and losses were recognised at 1 January 2004.
- Under UK GAAP, goodwill was amortised over its useful economic life, while from 1 January 2004 goodwill is not amortised under IFRS.
- Under UK GAAP, the final dividend for the year was provided in the results for that year while under IFRS it is provided in the year that it is declared.
- In respect of the Reynolds American transaction in 2004, which combined the Group's US domestic business (B&W) with R.J. Reynolds:
In addition, the gains and losses on the disposal of subsidiaries and fixed asset investments were shown below profit from operations under UK GAAP (£185 million).
- a £918 million unrecognised gain, included in the statement of total recognised gains and losses in UK GAAP, is included in profit from operations under IFRS; and
- a write-back of £216 million under UK GAAP for goodwill previously written off to reserves, is not required under IFRS, which results in an additional gain on the partial disposal of B&W.
- The other adjustments principally reflect:
- provisions for deferred tax on the unremitted profit of associates and part of the unremitted profit of subsidiaries required under IFRS but not UK GAAP;
- the application of IFRS to the results of associates; and
- an additional gain on the partial disposal of B&W in 2004 of £128 million, as a result of the IFRS adjustments for B&W in respect of post-retirement benefits.
Also, as explained in note 24, IAS32 and IAS39, which deal with financial instruments, were applied from 1 January 2005 and consequently the figures for 2004, 2003 and 2002 do not reflect the impact of those standards.