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SAPPI<br />
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS (Continued)<br />
for the year ended September <strong><strong>20</strong>06</strong><br />
35. SUMMARY OF DIFFERENCES BETWEEN INTERNATIONAL FINANCIAL REPORTING<br />
STANDARDS AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES<br />
(Continued)<br />
SAPPI<br />
<strong><strong>20</strong>06</strong> <strong>20</strong>05<br />
Comprehensive (loss) US$ million<br />
Net (loss) determined under United States GAAP................................... (116 ) (345)<br />
Other comprehensive (loss) income, net of tax<br />
Foreign currency translation adjustments......................................... (35 ) 2<br />
Additional minimum pension fund liability........................................ 63 (16)<br />
Comprehensive (loss) ............................................................ (88 ) (359)<br />
The taxation effect applicable to other comprehensive income items relate only to the additional<br />
minimum pension fund liability and results in a tax benefit of US$40 million (<strong>20</strong>05: US$8 million) being<br />
reported directly through equity.<br />
Accumulated other comprehensive income balances (based on IFRS numbers)<br />
Foreign Currency<br />
Translation<br />
Adjustments<br />
Goodwill<br />
Written Off<br />
F-110<br />
Revaluation of<br />
Derivative<br />
Instruments<br />
Additional<br />
Minimum Pension<br />
Liability<br />
Total Accumulated<br />
Other<br />
Comprehensive<br />
Income<br />
Balance—September <strong>20</strong>04<br />
(as reported) . . . . . . . . . . . 246 (53) (2) (159) 32<br />
Effect of adoption of IFRS. (246) — 2 — (244 )<br />
Balance—Setember <strong>20</strong>04 . . — (53) — (159) (212 )<br />
Current period change .... 2 — — (16) (14 )<br />
Balance—September <strong>20</strong>05 . 2 (53) — (175) (226 )<br />
Current period change . . . . (35) — — 63 28<br />
Balance—September <strong><strong>20</strong>06</strong> . (33) (53) — (112) (198 )<br />
Adoption of FAS 123R<br />
<strong>Sappi</strong> has applied the modified retrospective approach with respect to the adoption of FAS 123R and<br />
has therefore recognised an expense in the current and prior period in respect of share options which have<br />
not vested.<br />
As at the end of September <strong><strong>20</strong>06</strong> there was US$8.0 million of total unrecognized compensation cost<br />
related to nonvested share-based compensation arrangements granted under the performance plan; that<br />
cost is expected to be recognized over a period of 2.15 years.<br />
<strong>Sappi</strong> has received US$10 million as a result of the exercise of 1,350,340 share options by the<br />
employees of <strong>Sappi</strong>.
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