As of 1 January 2005, the accounting policies applied have been changed to comply with the requirements under the International Financial Reporting Standards, IFRS.
This announcement shows the restatement of comparative figures for 2004 to be used for the first time in connection with Q1 2005 (un-audited). Comparative figures for 2004 are un-audited.
The restated IFRS figures comply with the requirements under IFRS, including the transition principles set out in IFRS 1 "First-time adoption of IFRS". The statements have been prepared in accordance with the accounting standards in force as of 1 January 2005. The 2005 Annual Report will be presented in accordance with the accounting standards in force at 31 December 2005. As a result changes may occur.
The transition to IFRS will result in the following changes for the Carlsberg Group:
a.
Goodwill, trademarks and other intangible assets with indefinite useful life will no longer be amortised. Instead, these assets will be subject to an annual impairment test in order to ensure that, as a minimum, the value of the assets corresponds to the carrying amount.
Trademarks and other intangibles with a finite useful life will still be amortised on a systematic basis.
b.
Provisions for retirement benefit obligations and similar obligations will be determined in accordance with IAS 19. All actuarial gains and losses will be recognised in the balance sheet as of 1 January 2004 in accordance with IFRS 1.
c.
As part of its business, the Carlsberg Group advances loans to the on-trade in certain countries. The lending activities are closely connected with trade conducted with such customers. In connection with the transition to IFRS, it has been decided that interest on such loans should be included in operating profit.
d.
Tax on profit from associated undertakings will be included in the results included in operating profit. Under the previous policy, tax was included in tax for the Group.
e.
The Carlsberg Group operates in certain countries with hyperinflation. The accounts of these entities will be translated in accordance with IAS 29. According to previous practice, the accounts of these entities were inflation-adjusted by converting non-current assets at historical rates and other assets and liabilities at closing rates. The income statement was translated at the average rates during the period.
f.
If specific dividend plans exist for subsidiaries, associated undertakings and joint ventures, deferred tax on profit to be appropriated is included for countries imposing withholding tax upon distribution.
g.
Restructuring costs in connection with acquisitions will no longer be recognised in the opening balance sheet of the company acquired and be included in goodwill. Such costs will be taken directly to the income statement.
h.
In accordance with IFRS 2, the Carlsberg Group's costs in connection with the share option programmes will be recognised in the income statement as the options are granted. The value of the share options is calculated in accordance with Black & Schole's valuation model for call options on the basis of the exercise price, etc.
i.
The IFRS principles for accounting treatment of financial instruments set out in IAS 39 and 32 will be implemented with effect from 1 January 2005.
In addition, certain reclassifications have been made in the income statement, the balance sheet, and the cash flow statement.
The effect of adopting IFRS is set out on the following pages with a description of the most significant changes.
For 2004 the changes will have the following effects:
- Operating profit decreases by DKK 41m.
- Consolidated profit increases by DKK 642m.
- The balance sheet total at 31 December 2004 increases by DKK 988m.
- Equity increases by DKK 686m.
In connection with the reporting of changes for 2004 due to the transition to IFRS it has also been decided to change the accounting treatment of certain types of returnable bottles in Baltic Beverages Holding (BBH). Previously the value of the bottles was deducted from net revenue. However, as the companies are no longer obliged to buy back the bottles, it has been decided that they be included in net revenue.
On an annual basis, this change for 2004 results in an increase in revenue in BBH (50%) of DKK 297m and a corresponding increase in cost of sales, leaving net results unchanged.
Download the entire announcement with appendices here
Further information:
Investors:
Mikael Bo Larsen, +45 33 27 12 23
Media:
Jens Peter Skaarup, +45 33 27 14 17