Notes on the EEV basis results
10. Adoption of altered policy for pension schemes to reflect the principles of IFRIC 14
To provide consistency, the EEV basis results reflect the altered IFRS policy for pension schemes to reflect the principles of IFRIC 14. The impact of the change is as follows:
| Half year 2008 £m | Half year 2007 £m | Full year 2007 £m | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Previous basis | Effect of change | Revised basis | As published | Effect of change | After change | As published | Effect of change | After change | |
| Operating profit from continuing operations based on longer-term investment returns | 1,448 | (18) | 1,430 | 1,326 | (8) | 1,318 | 2,542 | (12) | 2,530 |
| Short-term fluctuations in investment returns | (1,949) | (1,949) | 241 | 241 | 174 | 174 | |||
| Mark to market value movements on core borrowings | 171 | 171 | 113 | 113 | 223 | 223 | |||
| Shareholders' share of actuarial gains and losses on defined benefit pension schemes | (209) | 111 | (98) | 125 | (86) | 39 | 116 | (121) | (5) |
| Effect of changes in economic assumptions and time value of cost of options and guarantees | (189) | (189) | 275 | 275 | 748 | 748 | |||
| (Loss) profit before tax | (728) | 93 | (635) | 2,080 | (94) | 1,986 | 3,803 | (133) | 3,670 |
| Tax | 188 | (26) | 162 | (545) | 24 | (521) | (961) | 34 | (927) |
| (Loss) profit after tax | (540) | 67 | (473) | 1,535 | (70) | 1,465 | 2,842 | (99) | 2,743 |
| Discontinued operations | 241 | 241 | 241 | 241 | |||||
| Less minority interests | (2) | (2) | (1) | (1) | (21) | (21) | |||
| (Loss) profit for the period | (542) | 67 | (475) | 1,775 | (70) | 1,705 | 3,062 | (99) | 2,963 |
| Other movements in reserves | (148) | (148) | (246) | (246) | (166) | (166) | |||
| Shareholders' equity at the beginning of the period | 14,779 | (179) | 14,600 | 11,883 | (80) | 11,803 | 11,883 | (80) | 11,803 |
| Shareholders' equity at the end of the period | 14,089 | (112) | 13,977 | 13,412 | (150) | 13,262 | 14,779 | (179) | 14,600 |
The changes reflect the aggregate of those under IFRS, as shown in note O to the Group IFRS financial statements, and the shareholders' 10 per cent interest in the PAC with-profits element of the effect of the change in accounting policy reflected under EEV reporting.
