British American Tobacco Essay Example | Topics and Well Written Essays - 1750 words

British American Tobacco - Essay Example This is not required under generally accepted accounting standards in United Kingdom. As of December 2004, this resulted to additional deferred tax liability of 49 million pounds ( January 1, 2004 and 40 million pounds ) And for the year ended Dec 31, 2005 an additional charge of 7 million pounds. Under IFRS, it is necessary to provide deferred tax on the difference between the carrying values and tax base of assets in operations which use inflation accounting, and also all differences between the carrying values and tax base for land and buildings. As of December 2004, these resulted to an additional deferred tax liability of 16 million pounds. Under United Kingdom GAAP, the final dividend for the year is provided but on page 84 in accounting policy 15, under International financial accounting standards, it is should be provided in the year it is declared. Under United Kingdom Generally Accepted Accounting principles, certain of the group’s share based compensation plans did not result in a charge as they had no value or were finance thru issue of new shares of stocks. However the schemes financed by the purchase of shares did have value and were charged to operating profit over the vesting period based on the share price at the date of grant. Under International financial accounting standards, all share schemes will result in a charge based on fair market value of the grant as described on page 82 in accounting policy no. 7. e) Under the United Kingdom generally accepted accounting principles and international financial reporting standards, basic earnings per share are based on the profit attributable to ordinary earnings per share as based on the profit attributable to ordinary shareholders during this period. (This excludes shares held by the group's two employee share ownership trusts.) The difference between United kingdom Generally accepted accounting principles and international financial reporting standards figures is the due to the result of different treatment of the profit and amortisation of goodwill. For the United Kingdom generally accepted accounting principles, the adjusted diluted earnings per share uses same shares, investment costs written off, profit on disposal of subsidiaries and fixed asset investments, goodwill amortisation/impairment of brands and the exceptional credits arising from tax recoveries in Reynolds America in 2004. e) Under the International Financial Reporting Standards, the group will report regional business segments regional business as for United Kingdom Generally Accepted Accounting Principles. But Group costs, which are corporate costs that are not directly attributable to a particular segment of reporting will now be shown as a separate line in the segmental analysis. f) On page 83 in accounting policy 15, International Accounting Standards no 32 and International Accounting standards no 39 on the financial instruments will be used prospectively effectively starting January 1, 2005." REFERENCE: Director's report and account 2004.British American Tobacco. COMMENT: We have to follow the international fin