SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 Under
the Securities Exchange Act of 1934
For the month of March, 2005
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Commission File Number 001-13908
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AMVESCAP PLC
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(Translation of registrant's name into English)
30 Finsbury Square, London EC2A 1AG, ENGLAND
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
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Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- N/A
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Description of document filed: AMVESCAP HOLDS BRIEFING ON TRANSITION TO IFRS
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For Immediate Release
Contact: James Robertson
Phone: 404-724-4246
Contact: Angus Maitland
Phone: (44) 0207-379-5151
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AMVESCAP Holds Briefing on Transition to
International Financial Reporting Standards
London--March 2, 2005---As part of AMVESCAP PLC's preparation for the adoption
of International Financial Reporting Standards (IFRS), the Group is providing an
explanation of the key changes under the new standards to AMVESCAP's net asset
position at January 1, 2004 and its financial results for the year-ended
December 31, 2004. A briefing will be held today by James Robertson, chief
financial officer, and David Hartley, chief accounting officer.
The information in this release has been prepared on the basis of the IFRS
currently in issue and AMVESCAP's understanding of how those standards should be
applied. The standards in issue are subject to ongoing review and endorsement by
the European Union (EU), and the application of the standards continues to be
subject to review by the International Financial Reporting Interpretations
Committee.
Main Changes Affecting the Group
The most significant changes affecting the Group due to the IFRS transition are:
o The inclusion of a fair value charge in respect of outstanding employee
share options granted after November 7, 2002 (IFRS 2)
o The replacement of existing charges for awards under certain equity based
compensation plans with fair value charges spread over revised time periods
(IFRS 2)
o The cessation of goodwill amortization (IFRS 3)
o The inclusion in the balance sheet of all employee benefit liabilities
(IAS 19)
Process of Transition
The Group currently prepares its consolidated financial statements under U.K.
Generally Accepted Accounting Practice (U.K. GAAP). For the year-ended December
31, 2005, the Group will be required to prepare its consolidated financial
statements in accordance with IFRS as adopted by the EU. AMVESCAP's first IFRS
results will be its Q1 2005 earnings release and AMVESCAP's first Annual Report
under IFRS will be for the year-ended December 31, 2005. The date of transition
to IFRS is January 1, 2004, this being the start of the earliest period of
comparative information required in the U.K.
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Transitional Arrangements
IFRS 1 'First-time Adoption of International Financial Reporting Standards' sets
out how a company should apply IFRS at transition. The standard requires a
company to use accounting policies that comply with each IFRS effective at the
reporting date for its first IFRS financial statements and apply those policies
retrospectively to all periods presented in those statements. The standard
provides for a number of exceptions to this general principle to assist the
transition. AMVESCAP's approach to these exemptions, where applicable, is
included in the discussion below.
Significant Changes in Accounting Policies
The significant changes in Group accounting policies due to the transition to
IFRS are as follows:
IFRS 2 Share-based Payment
The Group will recognize a charge in the Profit and Loss Account for the fair
value of outstanding share options granted to employees after November 7, 2002.
The charge will be calculated using a stochastic option valuation model and will
be charged over the relevant option vesting periods, adjusted to reflect
expected and actual levels of vesting. Currently there is no charge in the
Profit and Loss Account related to share options granted to employees.
In addition, the Group will adjust the charge made in the Profit and Loss
Account for awards made under Long-term Incentive Plans to recognize the fair
value of the awards granted to employees. The fair value of an award is
calculated as the value of the shares on the date of grant, discounted for the
dividends forgone over the holding period of the award. The fair value charges,
adjusted to reflect expected and actual levels of vesting, will be spread over
the vesting period of the awards. Previously, the undiscounted value of an award
at the date of grant was charged over the vesting period of the award. Awards
that lapsed were credited to the Profit and Loss Account.
There is no impact as a result of these changes on opening shareholders' equity
as at January 1, 2004. The impact on the Profit and Loss Account for the
year-ended December 31, 2004 is not material.
IFRS 3 Business Combinations
In accordance with the transitional provisions of IFRS 1, the Group has chosen
to apply IFRS 3 prospectively from the date of transition. This will result in
the value of goodwill arising from previous acquisitions being frozen at the
value held on the Group Balance Sheet as at January 1, 2004 and the reversal of
any amortization charged in 2004. Goodwill will then be subject to an annual
impairment review in accordance with the standard and would be subject to an
impairment adjustment if there are indications that the carrying value may not
be recoverable. These changes result in a credit to the Profit and Loss Account
for the year-ended December 31, 2004 of approximately (pound)150 million.
IAS 21 The Effects of Changes in Foreign Exchange Rates
Upon transition to IFRS, the Group has elected to apply IAS 21 retrospectively
to its goodwill and intangible asset balances. The Group's goodwill and
intangible assets were previously recorded in pounds sterling from their
respective acquisition dates. The result of this application is that the
goodwill and intangible assets will be redenominated into their underlying
currencies and will subsequently be re-measured each reporting date for the
effect of changes in foreign exchange rates. This change results in a decrease
in the opening shareholders' equity as at January 1, 2004 of approximately
(pound)130 million.
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IAS 19 Employee Benefits
The Group will recognize the net liability for defined benefit post retirement
schemes on the Balance Sheet and will take actuarial gains and losses on a
systematic basis to the Profit and Loss Account, in accordance with the
permitted methods of recognition under the standard. Through 2004, the Group
accounted for defined benefit schemes in accordance with SSAP 24 'Accounting for
pension costs'.
These changes reduce opening shareholders' equity as at January 1, 2004 by
approximately (pound)30 million but have no material effect on the Profit and
Loss Account for the year-ended December 31, 2004.
IAS 10 Events After the Balance Sheet Date
The Group will recognize dividends declared after the balance sheet date in the
reporting period in which they are declared, as they represent non-adjusting
events after the balance sheet date under IFRS.
The change results in an increase in opening shareholders' equity as at January
1, 2004 of approximately (pound)53 million and an increase in the dividend
recorded in relation to the year-ended December 31, 2004 of approximately
(pound)12 million.
IAS 39 Financial Instruments: Recognition and Measurement
The Group has opted not to apply the requirements of IAS 39 in respect of
comparative 2004 information. The Group will therefore follow the requirements
of IFRS 1 and disclose the nature of the main adjustments required for the
comparative information to comply with IAS 39 in AMVESCAP's first Annual Report
under IFRS. The adoption of IAS 39 for the year-ended December 31, 2005 will be
treated as if arising from a change in accounting policy and appropriate
disclosures will be provided in accordance with IAS 8 'Accounting Policies,
Changes in Accounting Estimates and Errors'.
Under IAS 39, the Group's asset investments will be held at fair value and most
will be classified as 'Available for Sale'. Unrealized gains and losses on these
investments will be taken to reserves and only recognized through the Profit and
Loss Account on sale or impairment of the investment.
The Group also intends to apply hedge accounting for its U.S. dollar-denominated
debt. Hedge accounting under IAS 39 will enable the Group to designate a hedging
relationship between the U.S. dollar-denominated debt and the net investment in
the Group's U.S. subsidiaries and to offset the related effective foreign
exchange movement in equity. The hedging will result in the accounting treatment
under IFRS being consistent with U.K. GAAP.
Further Communication
AMVESCAP's 2004 U.K. GAAP annual report will be published in March 2005.
In April 2005, the Group intends to provide shareholders and the financial
community with a reconciliation of Equity Shareholders' Funds as at January 1,
2004 from U.K. GAAP to IFRS. Such reconciliations will also be presented in
respect of the Profit and Loss Account, Balance Sheet and Cash Flow Statement
for the year-ended December 31, 2004.
The financial information to be presented in April 2005 will still be subject to
the ongoing development of IFRS and hence may change. The Group will keep
shareholders and the financial community informed of the impact of any material
changes as necessary.
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AMVESCAP is a leading independent global investment manager dedicated to helping
people worldwide build their financial security. Operating under the AIM, AIM
Trimark, INVESCO, INVESCO Perpetual and Atlantic Trust brands, AMVESCAP strives
to deliver outstanding products and services through a comprehensive array of
retail and institutional products for clients around the world. The Company is
listed on the London, New York and Toronto stock exchanges with the symbol
"AVZ." Additional information is available at www.amvescap.com.
Members of the investment community and general public are invited to listen to
the conference call today, Wednesday, March 2, 2005, at 2:30 p.m. GMT (9:30 a.m.
EST), by dialing one of the following numbers: 610-769-8537 or 888-909-8529 for
U.S. callers. An audio replay of the conference call will be available until
Wednesday, March 9, 2005, at 10:00 p.m. GMT by calling 402-220-0361 or
1-800-754-7871 for U.S. callers. The presentation slides that will be reviewed
during the conference call will be available on AMVESCAP's Web site at
www.amvescap.com.
# # #
This release may include statements that constitute "forward-looking statements"
under the United States securities laws. Forward-looking statements include
information concerning possible or assumed future results of our operations,
earnings, liquidity, cash flow and capital expenditures, industry or market
conditions, assets under management, acquisition activities and the effect of
completed acquisitions, debt levels and the ability to obtain additional
financing or make payments on our debt, regulatory developments, demand for and
pricing of our products and other aspects of our business or general economic
conditions. In addition, when used in this report, words such as "believes,"
"expects," "anticipates," "intends," "plans," "estimates," "projects" and future
or conditional verbs such as "will," "may," "could," "should," and "would" or
any other statement that necessarily depends on future events, are intended to
identify forward-looking statements.
Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. Although we make such statements based on
assumptions that we believe to be reasonable, there can be no assurance that
actual results will not differ materially from our expectations. We caution
investors not to rely unduly on any forward-looking statements. In connection
with any forward-looking statements, you should carefully consider the areas of
risk described in our most recent Annual Report on Form 20-F, as filed with the
United States Securities and Exchange Commission (SEC). You may obtain these
reports from the SEC's Web site at www.sec.gov.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMVESCAP PLC
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(Registrant)
Date 2 March, 2005 By /s/ Michael S. Perman
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(Signature)
Michael S. Perman
Company Secretary