Meeting everyday needs of people everywhere - Unilever

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Key divergence statements from United States GAAP Unilever Group Unilever´s consolidated accounts are prepared in accordance with accounting principles which differ in some respects from those applicable in the United States. The following is a summary of the approximate effect on the Group’s net profit, combined earnings per share and capital and reserves of the application of United States generally accepted accounting principles (US GAAP). 00000000000000001111 Fl. million 0110511150 1999 1998 1997 00000000000511111110 11110 11110 Net profit as reported in the consolidated profit and loss account 6 106 6 488 10 923 Attributable to: NV 3 882 3 655 7 649 PLC 2 224 2 833 3 274 US GAAP adjustments: Profit on sale of speciality chemicals businesses — — 244 Goodwill (470) (437) (325) Identifiable intangibles (247) (240) (215) Restructuring costs 99 (412) 89 Interest (19) (54) (22) Pensions (28) 16 (192) Taxation effect of above adjustments 47 244 79 00000000000511111110 11110 11110 Net increase/(decrease) (618) (883) (342) 1110 11110 11110 Approximate net income under US GAAP 5 488 5 605 10 581 Attributable to: NV 3 472 2 941 7 458 PLC 2 016 2 664 3 123 00000000000000001111 Approximate combined net income per share under US GAAP Guilders per Fl. 1.12 (1997-98: Fl. 1) of ordinary capital 5.20 5.01 9.47 Approximate combined diluted net income per share under US GAAP Guilders per Fl. 1.12 (1997-98: Fl. 1) of ordinary capital 5.08 4.90 9.26 00000000000000001111 Capital and reserves as reported in the consolidated balance sheet 17 105 10 464 Attributable to: NV 13 492 7 814 PLC 3 613 2 650 US GAAP adjustments: Goodwill 8 629 8 734 Identifiable intangibles 6 584 5 945 Restructuring costs 229 109 Interest 1 223 1 095 Pensions 408 491 Dividends 1 970 17 886 Taxation effect of above adjustments (2 265) (2 209) 1110 11110 Net increase 16 778 32 051 1110 11110 Approximate capital and reserves under US GAAP 33 883 42 515 Attributable to: NV 25 165 28 479 PLC 8 718 14 036 00000000000000001111 The aggregate amounts included in capital and reserves in respect of cumulative currency translation adjustments are as follows: Balance 1 January (8 289) (6 960) (7 661) Arising during the year 774 (1 329) 701 1110 11110 11110 Balance 31 December (7 515) (8 289) (6 960) 1110 11110 11110 The aggregate amounts of foreign currency transaction gains and (losses) charged in the consolidated profit and loss account are: (5) (196) (118) 00000000000000001111
Differences from United States GAAP Unilever Group The consolidated accounts of the Unilever Group have been prepared in accordance with accounting principles which differ in certain respects from those generally accepted in the United States (US GAAP). The principal differences are set out below. Profit on sale of chemicals businesses Unilever calculates profit on sale of businesses after writing back any goodwill previously charged directly to reserves. Under US GAAP the profit on disposal of the discontinued speciality chemicals businesses is stated net of the relevant unamortised goodwill included on the balance sheet and the cumulative currency retranslation differences recognised through the statement of total recognised gains and losses. Goodwill and other intangibles Prior to 1 January 1998 Unilever wrote off goodwill and all other intangible assets arising on the acquisition of new interests in group companies and joint ventures directly to profit retained in the year of acquisition. Under US GAAP goodwill and identifiable intangibles, principally trade marks, are capitalised and amortised against income over their estimated useful lives, not exceeding 40 years. There is no difference between the accounting policy applied to goodwill and intangible assets purchased after 1 January 1998 and US GAAP. Restructuring costs Under Unilever’s accounting policy certain restructuring costs are recognised when a restructuring plan has been announced. Under US GAAP certain additional criteria must be met before such charges are recognised. Interest Unilever treats all interest costs as a charge to the profit and loss account in the current period. Under US GAAP interest incurred during the construction periods of tangible fixed assets is capitalised and depreciated over the life of the assets. Pensions Under Unilever´s accounting policy the expected costs of providing retirement pensions are charged to the profit and loss account over the periods benefiting from the employees´ services. Variations from expected cost are similarly spread. Under US GAAP pension costs and liabilities are calculated in accordance with Statement of Financial Accounting Standards No. 87 (SFAS 87), which requires the use of a prescribed actuarial method and a set of measurement principles. Investments Unilever accounts for current investments, which are liquid funds temporarily invested, at their market value. Unilever accounts for changes in the market value of current investments as interest receivable in the profit and loss account for the year. Under US GAAP, such current asset investments are classified as ‘available for sale securities’ and changes in market rates, which represent unrealised gains or losses, are excluded from earnings and taken to stockholders’ equity. Unrealised gains and losses arising from changes in the market values of securities available for sale are not material. Unilever accounts for fixed investments other than in joint ventures at cost less any amounts written off to reflect a permanent diminution in value. Under US GAAP such investments are held at fair value. The difference is not material. Dividends The proposed final ordinary dividends are provided for in the Unilever accounts in the financial year in the year to which they relate. Under US GAAP such dividends are not provided for until they become irrevocable. Cash flow statement Under US GAAP various items would be reclassified within the consolidated cash flow statement. In particular, interest received, interest paid and taxation would be part of net cash flow from operating activities, and dividends paid would be included within net cash flow from financing. In addition, under US GAAP cash and cash equivalents comprise cash balances and current investments with an original maturity at the date of investment of less than three months. Under Unilever’s presentation, cash includes only cash in hand or available on demand less bank overdrafts. Movements in those current investments which are included under the heading of cash and cash equivalents under US GAAP form part of the movement entitled ‘Management of liquid resources’ in the cash flow statements. At the end of 1999 the balance of such investments was Fl. 62 million (1998: Fl. 6 622 million, 1997: Fl. 3 954 million). Exceptional items In accordance with United Kingdom Financial Reporting Standard Number 3 (Reporting Financial Performance) certain nonoperating exceptional items are shown separately in the profit and loss account below operating profit and before interest. Under US GAAP most non-operating exceptional items would be included in operating profit from continuing operations. The profit arising on disposal of the speciality chemicals businesses in 1997 would be presented as a separate line below income from continuing operations. Discontinued operations Unilever analyses turnover and operating profit between continuing and discontinued operations. Under US GAAP the operating profit from discontinued operations would be shown on a separate line below income from continuing operations.
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Unilever N.V. 1999 Annual Report on
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Financial highlights • Excellent
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Chairmen’s Statement The principa
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About Unilever History and structur
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