As of January 1, 2005, the Company will have to prepare its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS).
Akzo Nobel currently prepares its financial statements under Generally Accepted Accounting Principles in the Netherlands (NL GAAP). But because of the transition to the new system, the “old” figures for this year have been restated according to IFRS reporting standards to ensure that comparative 2004 figures are available.
“The implementation of IFRS was a major effort, even though we were already partly applying similar NL GAAP and US GAAP standards,” explained Akzo Nobel CFO Rob Frohn. “In our detailed report we provide a bridge between both systems. This provides a transparent view on the impact of IFRS on our Company.”
The changes in the restated figures are mainly attributable to accounting for pensions and other post-retirement benefits, different recognition of deferred taxes on inter-company profit, deferred recognition of the payment received from Pfizer for the asenapine cooperation, and accounting for goodwill.
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Safe Harbor Statement*
This unaudited report contains certain forward-looking statements which address such key issues as Akzo Nobel’s future financial results following the transition from NL GAAP to IFRS, including, in particular, the expected impacts of such change on employee benefit and pension accounting, revenue recognition, the method of accounting for income taxes and business combinations, provisions, share-based payments, investments in nonconsolidated companies, nonrecurring items, translation differences and certain other prospective changes related to the transition from reporting in NL GAAP to reporting under IFRS. Such statements are subject to change and should be carefully considered, and it should be understood that many factors could cause forecasted and actual results to differ from these statements. These factors include, but are not limited to, changes in regulations or interpretations related to the implementation and reporting under IFRS, decisions to apply a different option of presentation permitted by IFRS, and various other factors related to the implementation of IFRS. For a more complete discussion of the risk factors affecting our business please refer to our Annual Report on Form 20-F filed with the United States Securities and Exchange Commission.
The financial information presented contains details of the transitional adjustments required to present certain historical financial results of the Company under IFRS. Future presentation of this historical financial information may be in a different format or may be present different results than those in this report. The transitional adjustments presented have been calculated on the basis of the specific facts of the transaction and should not be used as indicators of future adjustments between NL GAAP and IFRS that will be required, due to the risk and uncertainty surrounding events in the future. This report should not be used as a projection of future results or financial condition.
* Pursuant to the U.S. Private Securities Litigation Reform Act 1995.