40.
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RECONCILIATION OF SA GAAP TO IFRS
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As stated in the accounting
policies, these are the group’s first consolidated financial statements
prepared in accordance with IFRS. The disclosures required by IFRS 1 (First–time
Adoption of International Financial Reporting Standards) concerning the
transition from South African Statements of Generally Accepted Accounting
Practice (SA GAAP) to IFRS and the required changes in accounting policies
are set out below. |
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Year ended |
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IFRS
transition |
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Note |
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31 Dec 2004 |
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1 January 2004 |
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Rm |
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Rm |
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RECONCILIATION OF EQUITY |
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Equity as previously reported |
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under SA GAAP |
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879,1 |
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203,7 |
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Adjustments upon adopting IFRS |
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1,1 |
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30,4 |
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Effect of restatements per note
41 |
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(26,0) |
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(4,7) |
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Restated equity under IFRS |
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854,2 |
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229,4 |
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Minority interests in subsidiaries |
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Previously reported outside of equity |
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9,4 |
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0,1 |
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Restated equity |
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863,6 |
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229,5 |
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Increase/ |
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Increase/ |
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(decrease) |
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(decrease) |
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Rm |
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Rm |
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RECONCILIATION OF BALANCE SHEET |
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Property, plant and equipment |
1 |
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8,4 |
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34,1 |
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Investment property |
1 |
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9,3 |
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8,2 |
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Deferred taxation assets |
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(15,4) |
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– |
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Deferred taxation liabilities |
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(0,6) |
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(11,9) |
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Minorities interest |
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(0,6) |
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– |
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Net increase to equity |
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1,1 |
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30,4 |
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RECONCILIATION OF INCOME STATEMENT |
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Net profit as previously reported under SA GAAP |
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301,5 |
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– |
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Change in depreciation rates |
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12,2 |
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– |
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Negative goodwill |
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(36,5) |
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– |
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Share-based payments expense |
2 |
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(11,8) |
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– |
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Taxation – deferred |
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(4,8) |
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– |
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Minority share of income |
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(0,2) |
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– |
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Restated net profit under IFRS |
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260,4 |
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– |
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Effect of restatements per note
41 |
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(21,3) |
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– |
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Restated net profit |
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239,1 |
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– |
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Notes
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1.
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Property, plant and equipment and investment property
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Previously property, plant and equipment and investment property were depreciated on a straight line basis to their estimated residual values. These residual values were fixed at the time of acquisition and not reassessed annually. |
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Under IFRS, significant
components of property, plant and equipment are identified separately and
the residual value of these components is now re–evaluated at each balance
sheet date. Depreciation ceases when the carrying value of the asset equals
its residual value. |
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The more robust assessment has resulted in an increase in the estimated useful
lives of the property, plant and equipment. The depreciation previously
recognised in the income statement has accordingly been reduced. |
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2.
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Share-based payments
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Previously, share–based
payments were not recognised as expenses. Under IFRS, all share based
payment transactions including those arrangements between a shareholder of a
company and employees must be recognised in the financial statements using a
fair value measurement basis. An expense is recognised when a service is
received. It requires the fair value of all equity instruments granted to be
based on market prices, and to take into account the terms and conditions
upon which those instruments were granted. |
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The company and group has no direct share based payment arrangements. A share–based
payment arrangement exists between employees and Daun & Cie AG, a major
shareholder (2004 : majority shareholder). Refer to note 19
for details of the arrangement. |
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The adoption of IFRS led to a share–based payment expense of
R11,8 million during 2004 and a share–based payments reserve of
R11,8 million. |
