domnick hunter group, the international business dedicated to the provision of high quality filtration, purification and separation products for a wide range of industries and applications today announces the impact of the transition to IFRS.
For financial periods beginning on or after 1 January 2005, domnick hunter group plc is required to prepare its financial statements under International Financial Reporting Standards (“IFRS”). This announcement sets out how the Group's reported performance and financial position are affected by this change. The first reporting under IFRS will be the 30 June 2005 Interim Report followed by the Annual Report for the year ending 31 December 2005.
The introduction of IFRS does not impact the Group's underlying business but does result in some changes to previously reported results and financial position. IFRS will also require additional disclosures in certain areas in future annual and interim reports. The changes arising from the application of IFRS to the 2004 reported results and financial position are set out in this announcement. The additional disclosures will be included in the 2005 Annual Report.
The transition to IFRS does not affect the underlying cash flows of the Group, nor does it impact on the ability of the Group to pay dividends.
The key changes for the Group resulting from the adoption of IFRS are:
• Goodwill is frozen and subject to annual impairment review.
• Negative goodwill is recognised immediately in the Income Statement in the year of acquisition.
• The pension deficit is presented in full on the Balance Sheet in a manner similar to the FRS17 disclosures included in the 2004 Annual Report.
• Final dividends are not recognised until approved at the Annual General Meeting.
• The fair values of outstanding derivative financial instruments, exclusively forward foreign currency contracts, are recognised on the Balance Sheet.
• Deferred tax assets and liabilities are recognised in connection with tax-deductible goodwill.
An overview of the impact on the 2004 reported results and financial position is as follows:
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