Assets Classified as Held for Sale and Discontinued Operations
Reconciliation of the net earnings for 2004 reported in the Dutch
VNU has elected to apply the provisions of IFRS 5, “Non-current
GAAP consolidated financial statements to the profit for the year
Assets Held for Sale and Discontinued Operations”, to non-current
attributable to the equity holders of VNU under IFRS:
assets (or disposal groups) that meet the criteria to be classified as held for sale and operations that meet the criteria to be classified as
Dutch GAAP net earnings 2004
discontinued operations as from January 1, 2004. Reconciliations of Equity as of January 1, 2004 and December 31, 2004 and Net Income for the Year 2004 Reconciliation of VNU’s issued capital and reserves as reported in the consolidated financial statements under Dutch GAAP to its capital and reserves attributable to VNU’s equity holders under IFRS as of January 1, and December 31, 2004: January 1, 2004
(EUR IN MILLIONS)
Issued capital and reserves under Dutch GAAP
December 31, 2004
4,066
3,957
—
114
Intangible assets
(a)
Deferred tax liability for identified intangible assets
(b)
(529)
(433)
Income taxes
(b)
12
36
Revenue recognition
(c)
(118)
(99)
Employee benefits
(d)
(35)
(11)
Provisions
(e)
46
(7)
Leases
(g)
(4)
(7)
(h)
43
—
Other adjustments
(i)
11
1
163
Goodwill amortization and impairment charges
(a)
247
Amortization of identified intangible assets
(a)
(100)
Deferred taxes for identified intangible assets
(b)
33
Income taxes
(b)
30
Revenue recognition
(c)
(5)
Employee benefits
(d)
(16)
Provisions
(e)
(47)
Share-based payments
(f)
(21)
Leases
(g)
(4)
World Directories book gain and other tax items
(h)
(19)
(i)
(11)
Other adjustments
World Directories book gain and other tax items
Equity attributable to equity holders of VNU under IFRS
2004
(EUR IN MILLIONS)
IFRS profit for the year 2004 attributable to equity holders of VNU
250
Explanation of the Effect of the Transition to IFRS The following is an explanation of the reconciling items shown above and changes that impact classification and presentation but do not give rise to amounts in the reconciliations. (a) Business Combinations, Goodwill, and Intangible Assets Under Dutch GAAP, acquired goodwill was capitalized and amortized
3,492
3,551
over its estimated useful life. IFRS 3 requires that goodwill is not amortized, but is subject to an annual impairment test. As a result, VNU reversed 2004 goodwill amortization and impairment charges of EUR 247 million recorded under Dutch GAAP. Any 2004 Dutch GAAP impairment charges related to VNU’s 2004 recognition of deferred tax assets of a prior business combination, which were not initially valued in the purchase price accounting, were not reversed for IFRS. The resulting tax gain was recognized in the statement of income, and the goodwill associated with the business combination was reduced by an equal amount. VNU conducted an impairment test of the IFRS goodwill balance at January 1, 2004 and at December 31, 2004 in accordance with IAS 36, “Impairment of Assets”. As part of the implementation of IFRS, VNU defined its cash generating units, which differ from the level at which goodwill was tested under Dutch GAAP. As a result of the impairment tests, no impairment charges were recorded at January 1, 2004 or at December 31, 2004. Under Dutch GAAP, VNU classified intangible assets such as trade names, trade shows, customer contracts, and other intangible assets under a single account called publishing rights. As part of VNU’s conversion to IFRS, those intangibles which met the criteria of IAS 38, 115