BAA posts surplus despite new standard
BAA, the international airport group, has reported an operating profit of £355m under the new controversial accounting standard, FRS 17.
Group operating profit pre-FRS 17 would have been Pounds 374m for year ended 30 September 2001. BBA is one of the few companies that have opted for early adoption of the new accounting rule, which takes effect in stages until 2003.
Andrew Hill, BAA group financial controller, said: ‘We set up a working team to evaluate the impact of the standard on the accounts. We decided to introduce FRS 17 at the earliest opportunity and presented the figures in a simple format to ensure our key audiences gained a clear understanding of the change.’
The company has provided figures on both the new and previous basis in its first quarter and half year results.
Today ailing engineering conglomerate Invensys published its interim results but held back from issuing any disclosures on its pension fund under FRS 17.
The news comes as asset management group SEI Investments published its own independent research into the awareness of FRS 17 by finance directors and chief executives of UK companies.
SEI found that of the 101 chief executives and finance directors polled, 88% of CEs could not describe anything about the new rule, while 79% of FDs admitted they knew nothing about it.
Patrick Disney, UK managing director of SEI, said: ‘The introduction of FRS 17 again raises the issue of pension contributions for finance directors. Already the recent volatility of markets have raised the probability of increased contribution levels from a company and FRS 17 is yet another pressure to deal with.’
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FRS 17 harmful to UK companies