British Land Co plc has outlined the impact on its results of the introduction of new accounting standards in 2005. The property group is moving from UK Generally Accepted Accounting Practice (UK GAAP) to International Accounting Standards (IAS) in the financial year starting April 1, 2005.
If restated under IAS, the EPS figure for the six months to end-September 2004 would rise to 72 pence, compared with 59 pence under UK GAAP, British Land said.
The reason for this is that under the new standards, surpluses arising from property revaluation will be included in the profit and loss account, or income statement as it will be known under IAS, and not accounted for through reserves, as is the case under UK GAAP.
British Land said this change will introduce volatility to the income statement, which previously affected the balance sheet only.
The group stressed that the underlying performance of the business, its cash flows and dividend policy will be unaffected by the introduction of IAS.
It said net assets as at Sept 30 2004 would also be higher under IAS than under GAAP. Restated adjusted net assets would be 12 pence higher at 1,061.
Another change is that under IAS, contingent tax will be recognised in full on property valuations. Under UK GAAP treatment, this tax is only accounted for if it is actually incurred.