BT keeps quiet on IFRS effects
BT has refused to disclose how international financial reporting standards will affect its acquisition of US technology company Infonet despite $100m (£54m) being wiped off its revenues under UK GAAP.
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The telecoms group confirmed to Accountancy Age that it had already carried out some ‘modelling’ of the acquisition under IFRS, but was not willing to divulge what the effects would be until the coming year.
BT Group acquired Infonet, a US network solutions company, for $575m net. But following the restatement of its accounts from US to UK GAAP, revenues at Infonet were reduced by 16% from $620m to $520m.
‘In terms of the deal itself, it was principally a question of working out what the consequences were in terms of cash,’ a BT Group spokesman said. He confirmed that modelling under IFRS had been carried out.
The restatement under UK GAAP would have no impact on cash flow or profits. It was, said the company, a result of differences in revenue recognition between the UK and the US.
BT will pay $965m for Infonet dependent on shareholder approval, but the company’s $390m cash balance will reduce this figure to $575m. Following the announcement, BT’s share price fell 2p to 190.5p on the news, where it remained on Tuesday.