GSK Annual Report 2002

37 Reconciliation to US accounting principles continued
Notes to the financial statements GlaxoSmithKline 129
The following is a summary of the material adjustments to profit and shareholders’ funds which would be required if US GAAP had been
applied instead of UK GAAP. These adjustments have been reflected in the income statements and balance sheets presented in accordance
with US GAAP.
2001 2000
2002 (restated) (restated)
Profit £m £m £m
Profit attributable to shareholders under UK GAAP 3,915 3,053 4,106
Less: SmithKline Beecham’s pre-acquisition profit attributable to
shareholders under UK GAAP and merger alignment adjustments – – (2,237)
US GAAP adjustments:
Write-off of SmithKline Beecham in-process R&D acquired – – (6,324)
Capitalised interest 25 18 15
Computer software 20 (3) 13
Purchased intangibles (86) (140) –
Reversal/(amortisation) of goodwill 18 (1,261) (559)
Amortisation and impairment of intangible assets (4,184) (2,266) (166)
Recognition of cost of sales on fair value step-up of inventory – (298) –
Disposal of purchased investment – (117) –
Product divestments 7 – –
Loss on disposal of subsidiary – 204 –
Pensions and post-retirement benefits (138) (12) 75
Stock-based compensation (331) (162) (254)
Provision against ESOT shares 51 (108) 26
Derivative instruments 8 15 –
Restructuring 37 182 –
Tax benefits on exercise of US stock options (13) (56) (9)
Merger transaction costs – – 66
Deferred taxation 1,182 883 20
Impairment of equity investments (8) (75) –
Net income/(loss) under US GAAP before cumulative effect of changes
in accounting principles 503 (143) (5,228)
Cumulative effect of changes in accounting principles (90) – –
Net income/(loss) after cumulative effect of changes in accounting principles 413 (143) (5,228)
2001
2002 (restated)
Equity shareholders’ funds £m £m
Equity shareholders’ funds under UK GAAP 6,581 7,390
US GAAP adjustments:
Tangible fixed assets 49 44
Investments 829 879
Product rights 18,590 22,927
Capitalised interest 175 155
Computer software (9) (29)
Goodwill 17,989 17,928
Other intangible assets (438) (377)
Unrealised gains on marketable securities 113 163
Pensions and other post-retirement benefits (1,198) 299
Employee Share Ownership Trust (2,826) (2,936)
Restructuring costs (6) (46)
Derivative instruments 98 29
Dividends 754 718
Deferred taxation (5,779) (7,037)
Shareholders’ equity under US GAAP 34,922 40,107
Certain items for the years ended 31st December 2001 and 2000 have been reclassified for comparative purposes.
During 2002, FRS 19 ‘Deferred Tax’ has been implemented by the Group under UK GAAP. This FRS requires deferred tax to be
accounted for on a full provision basis, rather than a partial provision basis as in 2001 and earlier years. This change has been
accounted for as a prior year adjustment for UK GAAP purposes and comparative adjustments to arrive at US GAAP have been
restated as necessary. This change had no impact on US GAAP results.