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Identifying
IIMR and normalised earnings adjustments
The categories
into which items tend to fall are listed below, together with
how they are treated, i.e. left in or taken out. The items taken
out are therefore the IIMR and normalised adjustments respectively.
See adjusting for tax
for further explanation.
FRS3 IIMR
Normalised
earnings
earnings earnings
Restructuring
of the business:
IN IN
OUT Reorganisation and rationalisation costs
relating
to continuing activities
IN IN IN
Profits or losses from trading of operation(s)
discontinue
during the year
IN OUT OUT
Profits or losses on sale or termination of
discontinued
operation(s)
IN OUT OUT
Profits or losses on sale of business(es)
Assets
and investments:
IN OUT
OUT Profits or losses on sale of fixed assets not purchased
for resale
IN OUT OUT
Amounts written off, or diminution invalue, of
fixed assets
or business(es) not purchased for
resale
IN IN IN
Profits, losses, write-offs or diminution in value
of assets
acquired for resale in the normal
course of
business
Debt restructuring:
IN OUT
OUT Profits or losses on reorganisation or
redemption
of long term debt
Prior
period adjustments:
IN OUT
OUT Prior period adjustments arising out of
accounting
policy changes
IN OUT OUT
Prior period adjustments arising out of past
fundamental
accounting errors
IN IN IN
Prior period adjustments of a normal, recurring
nature (e.g.prior
year tax adjustments within P
& L tax
charge) or adjustments to prior period
accounting
estimates
Provisions:
IN OUT
OUT Provisions for future costs and losses (e.g. sale
or termination
of an operation to be discontinued
in a subsequent
year)
IN OUT OUT
Release of provision, made in prior years, for
future costs
and losses
IN OUT OUT
Utilisation or release of provision made in prior
years for
future costs and losses
Goodwill:
IN OUT
OUT Goodwill depreciated through the Profit & Loss
account
IN OUT OUT
Goodwill realised or written off on sale of
business(es)
Pension
fund:
IN IN
OUT Exceptional pension fund costs or credits
relating
to continuing activities
IN OUT OUT
Pension fund costs relating to the
discontinuation
of an activity
IN IN OUT
Exceptional pension fund costs, provision, or
credit transfer
arising from:
- bull or
bear markets for equities
- changes
in actuarial assessments
- conversion
from defined benefit to defined
contribution
scheme
Currency:
IN IN
OUT Exceptional currency effects on trading
transactions
IN OUT OUT
Currency movements which change the
- aluation
of long-term foreign assets or liabilities
Tax charge:
IN OUT
OUT Tax charge(s) relating to items (as above) which
are excluded
from both IIMR and normalised
earnings
- see Adjusting for tax
IN IN OUT
Tax charge(s) relating to items (as above) which
are excluded
from normalised, but not from
IIMR earnings
- see Adjusting for tax
IN IN OUT
Exceptional taxation of an abnormal or non-
recurring
nature, other than prior period
adjustments
Minority
interests:
IN OUT
OUT Minority interest(s) relating to items (as above)
which are
excluded from the IIMR headline
earnings
- see Adjusting
for minority interest'
IN IN OUT
Minority interest(s) relating to items (as above)
which are
excluded from normalised, but not
from IIMR
earnings - see
Adjusting
for minority interest'
Extraordinary
items:
IN OUT OUT
Extraordinary items which, if they ever occur,
must all
now be included within FRS3 earnings
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