BOC Report and accounts 2005 - Alle jaarverslagen

Notes to the financial statements 137
30. US accounting information continued
Revenue recognised in 2005 31.2
Contractually receivable amounts:
Year to 30 September 2006 32.5
Year to 30 September 2007 33.7
Year to 30 September 2008 30.8
Year to 30 September 2009 28.5
Year to 30 September 2010 27.3
Thereafter 4.1
Minimum future rentals 156.9
1. Contractually receivable amounts include amounts in respect of maintenance, safety and other operational costs.
k) Recently issued accounting pronouncements implemented in the year
EITF04–1 – Accounting for Pre-existing relationships between the Parties to a Business Combination
In October 2004, the Emerging Issues Task Force (EITF) reached a consensus on EITF issue 04–1. Issue 04–1 applies when two parties that have a
pre-existing contractual relationship enter into a business combination. If it is determined that assets of an acquired entity are related to a pre-existing
contractual relationship, thus requiring accounting separate from the business combination, management will evaluate whether the acquiring entity of the
Group should recognise contractual relationships as assets separate from goodwill in that business combination. EITF 04–1 did not have a material impact
on the Group’s results and financial position in the year.
l) Recently issued accounting pronouncements not yet implemented
SFAS151 – Inventory costs
SFAS151 was issued in November 2004 and is effective for all inventory costs incurred during fiscal years beginning after 15 June 2005.This statement
amends ARB 43 and requires all idle facility expense, excessive spoilage, double freight and re-handling costs to be recognised as current-period charges
regardless of whether they meet the criterion of “so abnormal” (as previously stated in ARB 43). In addition, ARB 43 requires that the allocation of fixed
production overheads to the costs of conversion be based on the normal capacity of the production facilities. Unallocated overheads are recognised as an
expense in the period in which they are incurred. Management does not believe that this statement will have a material effect on the Group’s results and
financial position under US GAAP in future periods.
SFAS153 – Exchanges of non-monetary assets
SFAS153 was issued in December 2004 and is effective for all non-monetary asset exchanges occurring in fiscal periods beginning after15 June 2005.
This statement amends APB Opinion 29, which is based on the principle that exchanges of non-monetary assets should be measured based on the fair
value of the assets exchanged. SFAS153 provides a general exception for exchange transactions that do not have commercial substance – that is,
transactions that are not expected to result in significant changes in the cash flows of the reporting entity. Management does not believe that this
statement will have a material effect on the Group’s results and financial position under US GAAP in future periods.
SFAS123(R) – Share-based payment (revised 2004)
SFAS123(R) was issued in December 2004 and is effective for the first annual reporting period that starts after 15 June 2005. It supersedes APB Opinion
25,Accounting for Stock Issued to Employees. SFAS123(R) is concerned with how to account for transactions in which an entity exchanges its equity
instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the
fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.The main effect of this revised standard is a
move from an intrinsic value method to a fair value based method. It will therefore result in an additional charge relating to the fair value of share options
in the Group’s income statement. Management does not believe that this will have a material effect on the Group’s results and financial position under US
GAAP in future periods.
SFAS154 – Accounting changes and error corrections – a replacement of APB Opinion No. 20 and FASB Statement No. 3.
SFAS154 was issued in May 2005 and is effective for fiscal years beginning after 15 December 2005.This statement replaces APB Opinion 20,Accounting
Changes, and SFAS 3, Reporting Accounting Changes in Interim Financial Statements.This Statement requires voluntary changes in accounting principles to
be reported via retrospective application, unless impracticable. Previous guidance given in APB Opinion 20 for reporting the correction of an error in
previously issued financial statements or a change in accounting estimates is unchanged in SFAS154. Management does not believe that this statement will
have a material effect on the Group’s results and financial position under US GAAP in future periods.
FIN47 – Accounting for conditional asset retirement obligations
FIN47 was issued in August 2005 and is effective for fiscal years ending after 15 December 2005.This interpretation clarifies the term ‘conditional asset
retirement obligation’ as used in SFAS143,Accounting for asset retirement obligations. FIN47 requires an entity to recognise a liability for the fair value
of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated.The fair value of a liability for the conditional asset
retirement obligation should be recognised when incurred - generally upon acquisition, construction, or development and/or through the normal
operation of the asset. Uncertainty about the timing and/or method of settlement of a conditional asset retirement obligation should be factored into the
measurement of the liability when sufficient information exists. Management does not believe that this interpretation will have a material effect on the
Group’s results and financial position under US GAAP in future periods.
m) Other information
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make significant estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period.Actual results could differ from those estimates.
£ million