Annual Report and Accounts 2006 - DCC plc

104notes to the financial statements47. Reconciliations from Irish GAAP to IFRSUp to and including 31 March 2005, the Group prepared its financial statements in accordance with generally acceptedaccounting practices in Ireland ('Irish GAAP'). Detailed explanations of the adjustments made to the full-year 2005 GroupIncome Statement and the Balance Sheet as at 31 March 2005 have been provided in the Restatement of FinancialInformation under IFRS published on 30 September 2005. The following is a summary of the principal changes ontransition to IFRS:OverviewIt is a requirement that the first IFRS financial statements include full comparative information for the year ended 31 March2005. The date of transition to IFRS for all standards, other than IAS 32 and IAS 39, is 1 April 2004, being the start of thecomparative period in the Group's first IFRS financial statements. As permitted under IFRS 1, the Group applied hedgeaccounting in accordance with Irish GAAP for the year ended 31 March 2005 and adopted IAS 32 and IAS 39 from 1 April 2005.A summary of the effect of IFRS on the Group's and Company's Balance Sheets as at 1 April 2004 and 31 March 2005 aswell as on the Group's Income Statement for the year ended 31 March 2005 is set out in the following sections:(1) Optional exemptions availed of on transition to IFRS(2) Impact of transition to IFRS(3) Group Income Statement for the year ended 31 March 2005 - reconciliation from Irish GAAP to IFRS(4) Group Balance Sheet as at 31 March 2005 - reconciliation from Irish GAAP to IFRS(5) Group Balance Sheet as at 1 April 2004 - reconciliation from Irish GAAP to IFRS(6) Company Balance Sheet as at 31 March 2005 - reconciliation from Irish GAAP to IFRS(7) Company Balance Sheet as at 1 April 2004 - reconciliation from Irish GAAP to IFRS(1) Optional exemptions availed of on transition to IFRSIFRS 1 sets out the procedures that the Group must follow when adopting IFRS for the first time as the basis forpreparing its consolidated financial statements. This standard permits a number of optional exemptions from the generalprinciple of retrospective restatement and the Group elected, in common with other listed companies, to avail of anumber of these exemptions as follows:(i) Business combinationsBusiness combinations undertaken prior to the transition date of 1 April 2004 have not been subject to restatement.Goodwill as at the transition date is carried forward at its carrying amount and, together with goodwill arising on businesscombinations subsequent to the transition date, is subject to annual impairment testing in accordance with IAS 36Impairment of Assets. As required by IFRS 1, an impairment review of goodwill was carried out at the transition date.This review indicated that no impairment provision was required.(ii) Property, plant & equipmentThe Group retained its existing carrying value of occupied properties, plant and equipment at 1 April 2004 as deemed cost,rather than either reverting to historical cost or carrying out a valuation at the date of transition as permitted by IFRS 1.(iii) Employee benefitsThe Group elected to recognise all cumulative actuarial gains and losses applicable to defined benefit pension schemes inthe transition balance sheet and adjusted them against retained income.(iv) Currency translation adjustmentsIFRS requires that on disposal of a foreign operation, the cumulative amount of currency translation differences previouslyrecognised directly in reserves for that operation be transferred to the Income Statement as part of the profit or loss ondisposal. The Group elected to deem the cumulative currency translation differences applicable to foreign operations to bezero as at the transition date. The cumulative currency translation differences arising after the transition date have beenre-classified from retained income to a separate component of equity (termed the 'foreign currency translation reserve')with no net impact on capital and reserves attributable to the Group's equity holders.(v) IAS 32 / IAS 39Given the delay encountered in receiving EU approval, the effective date of the revised versions of IAS 32 and IAS 39 was1 April 2005 and therefore the Group adopted these standards with effect from that date. The Group availed of theexemption under the transition rules of IFRS 1 not to restate the comparative information under IAS 32 and IAS 39.Comparative information on financial instruments for the year ended 31 March 2005 in the financial statements at 31March 2006 are presented on the existing Irish GAAP basis.