Irish Continental Group (ICG) said yesterday that the impact of implementing new accounting standards would have been to cut its profit before tax and exceptionals last year to €17.9 million from €21.1 million.
Changes to the method of accounting for retirement benefits under the new international financial reporting standards (IFRS) was the main reason for the reduction.
Earnings per share would also have been affected by the accounting changes, falling to 71.5 cent from 84.7 cent on an adjusted basis. Aside from the pension impact, changes to the rate at which certain assets are depreciated also contributed to the fall in earnings and net assets, which stood at €150.6 million at the end of 2004, compared to €176.6 million under the old accounting standards.
The depreciation change cut €12.4 million off net assets, while a further €10.2 million was taken off net assets by the revaluation of the company's fast ferry, Dublin Swift.
ICG said that implementation of the new accounting standards will reduce its after-tax profit this year by around €2.3 million, while cutting earnings per share by around 10 per cent when compared to the old methods of accounting.
The effect on net assets will depend on a number of factors, including the market conditions for the pension scheme at end-December.
However, ICG said that the introduction of the new accounting standards will have no impact on either turnover or cashflow nor does it affect the underlying operation of the business.
ICG will issue its first set of results under the new reporting standards, the interim results for the six months ended June 30th, on September 8th.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)