IFRS adoption update

BT Group PLC 21 March 2005 March 21, 2005 BT updates on the adoption of International Financial Reporting Standards (IFRS) BT Group plc ('BT') will be adopting International Financial Reporting Standards (IFRS) as the basis of accounting for the year ending 31 March 2006. As part of the transition to IFRS, BT is presenting today its latest view of the pro-forma financial effect of adopting IFRS for the year ended 31 March 2004. BT will continue to report under UK Generally Accepted Accounting Principles (UK GAAP) for the year ended 31 March 2005 and will subsequently present financial information in accordance with IFRS. Whilst some of the changes required by IFRS will impact BT's reported profits and net assets this has no impact on the cash flows generated by the business or the cash resources available for investment or distribution to shareholders. Furthermore the adoption of IFRS does not affect BT's strategy or underlying business performance. The main areas of impact for BT on adoption of IFRS include: • Recognition of defined benefit pension scheme assets and liabilities on balance sheet and finance charges associated with those assets and liabilities • Recognition of the fair value of share based payments • Amendment to the timing of recognition of certain property operating lease charges • Requirement to no longer amortise goodwill and to separately identify and amortise any other intangible assets on business combinations • Recognition of fair value movements on certain financial instruments from 1 April 2005 Hanif Lalani, Group Finance Director, commented: "The information provided today shows the latest view of the main IFRS effects on BT in advance of their adoption next year. IFRS requires more items to be marked to market, which may make future reported results more volatile, in particular through the net interest line. Our current view of the pro-forma effect of adopting IFRS for 2003/04 is to reduce EPS* by approximately 1.5 pence, compared to UK GAAP, and a minimal increase in net debt. For 2004/05 the EPS* effect is expected to be broadly neutral, compared to UK GAAP. It is important to note that these accounting changes do not affect our cash generation or our investment and shareholder distribution policy." *before goodwill amortisation and exceptional items Full details of the main expected IFRS changes and their adoption by BT will be provided in a presentation hosted by Hanif Lalani, Group Finance Director. The presentation will commence at 12.00pm (UK time) and is accessible at: Call details: 0870 608 1510 (UK)/+44 208 974 7900 (European)/ (001) 728 354 1175 (US). Password: IFRS Contact details: Investor Relations - +44 (0) 207 356 4909 The slide pack for the presentation will be accessible from 11.30am (UK time) at: http://www.btplc.com/news/presentations/generalpresentations/index.htm This information is provided by RNS The company news service from the London Stock Exchange

Companies

BT Group (BT.A)
UK 100

Latest directors dealings