Annual Report 2000 in PDF - Antofagasta plc

Notes to the Financial Statements1 Accounting Policiesa) Basis of accounting and functional currencyThe financial statements are prepared under the historical cost convention as modified by the revaluation of certain fixedassets (as described in Note 11) and in accordance with applicable accounting standards.The functional reporting currency of the Group is US Dollars, the principal currency in which the Group operates and inwhich assets and liabilities are held. These financial statements have also been presented in sterling on a supplementarybasis. Share capital remains denominated in sterling and, for the purposes of reporting in US dollars, share capital andshare premium are translated at the period end rate of exchange. In previous years, the Group financial statements werepresented in sterling with supplementary presentation in US dollars. As explained in Note 8, dividends are paid in bothUS dollars and sterling.b) Changes in accounting policies and application of new accounting standardsFour new accounting standards have been adopted in these financial statements. FRS 16, “Current Tax”, FRS 17,“Retirement Benefits” and FRS 18 “Accounting Policies” have had no effect on the Group’s financial position, results orcash flows. FRS 19 “Deferred Tax” has also been adopted, certain amounts in the balance sheet have been reclassified fromcreditors to debtors and provisions and prior year comparatives restated accordingly. This reclassification has had noeffect on the Group’s results, cash flows or net financial position.c) Group financial statements and basis of consolidationThe financial statements of the Group incorporate the consolidated assets, liabilities and results of the Company and itssubsidiary undertakings (“subsidiaries”). The results of subsidiaries acquired or disposed of are included in the financialstatements from the effective date of acquisition or up to the effective date of disposal.d) GoodwillPurchased goodwill is the difference between the cost of an acquisition and the aggregate fair values of the identifiableassets and liabilities acquired. Purchased goodwill is capitalised in the balance sheet at cost and amortised through theprofit and loss account on a straight line basis over its useful economic life. The gain or loss on subsequent disposal willinclude any attributable goodwill. Internally generated goodwill is not capitalised.ANTOFAGASTA PLC Annual Report 200042Prior to 1998, purchased goodwill was eliminated against the profit and loss reserve and negative goodwill was creditedto a separate capital reserve account. As permitted under the transitional arrangements of FRS 10 “Goodwill andIntangible Assets” adopted in the 1998 financial statements, such amounts previously written off or credited to reserveswere not reinstated as an asset, but will be charged or credited to the profit and loss account on disposal of the businessto which they relate.e) Currency translationAssets and liabilities denominated in foreign currencies are translated into US Dollars at the period end rates of exchange.Results denominated in foreign currencies have been translated into dollars at the average rate for each period. Asexplained in the Report of the Directors on page 26, the final dividend was converted at £1 = US$ 1.4421.