International Financial Reporting Standards: Re...

27 March 2006

The Sage Group plc ("Sage")

2005 restatement and new accounting policies under International Financial
Reporting Standards

As required by International Accounting Standards, Sage will report its
consolidated financial statements under International Financial Reporting
Standards (IFRS), for all accounting periods beginning on or after 1 October
2005. Previously the Group has applied UK Generally Accepted Accounting
Principles (UK GAAP). The first financial results under IFRS will be the 2006
interim results, for the period ended 31 March 2006, to be released on 10 May
2006.

Sage's results for the year ended 30 September 2005 were originally reported
under UK GAAP in December 2005. As indicated at that time, Sage today reports a
restatement (unaudited), under IFRS, of its 2005 financial results. Results for
the first half of 2005 are also included in the restatement.

The purpose of this restatement is to assist in understanding of Sage's future
IFRS financial results and comparison with prior periods. Sage has already
provided an illustration of IFRS impacts by presenting a restatement of its
2004 financial results. The impact of the restatement on the 2005 results is
broadly similar to the impact on the 2004 results. The fundamentals of Sage's
revenues, profits, cash flows and balance sheet are unaffected.

Restatements are shown for:

 i. Income Statement (previously referred to under UK GAAP as the Profit and
    Loss Account)
   
ii. Balance Sheet
   
iii. Cash Flow Statement - this restatement affects only the presentation of
    results
   
iv. Geographical segmentation of revenue and operating profit
   
The effects of the restatement upon the Income Statement are summarised below:

Year ended 30 September                Revenue      EBITA*         PBT
2005, £m                                                              
                                                                      
                                                                      
                                                                      
UK GAAP                                  776.6       211.1       205.4
                                                                      
IAS 18: Revenue                         (17.0)       (1.6)       (1.6)
                                                                      
IFRS 2: Share-based Payment                          (7.4)       (7.4)
                                                                      
IFRS 3: Business                 (i)                             (2.0)
Combinations                                                          
                                                                      
IAS 19: Employee Benefits                            (1.3)       (1.3)
                                                                      
IAS 38: Intangible Assets                                             
                                                                      
Development capitalisation                                         1.1
                                                                      
Development amortisation                                         (0.6)
                                                                      
Net development expenditure     (ii)                               0.5
                                                                      
                                                                      
                                                                      
IFRS                                     759.6       200.8       193.6
                                                                      
Impact of IFRS restatement              (17.0)      (10.3)      (11.8)
                                                                      
Impact of IFRS restatement                 -2%         -5%         -6%
(%)                                                                   
                                                                      

*EBITA measure (Earnings before interest, tax and amortisation)        
excludes the effects of                                                
                                                                       
(i) amortisation of acquired intangible assets                         
                                                                       
(ii) net capitalisation of software development expenditure            

Also released today are the Group's current accounting policies, which have
been revised to comply with current application of IFRS.

The full restatements and Sage's new accounting policies are available on 
www.sage.com/investors/ifrs.pdf

All future financial results will be reported under IFRS.

Enquiries:

The Sage Group plc [phone]

Paul Harrison, Finance Director

Phil Branston, Investor Relations

Tulchan Communications [phone]

Julie Foster

Kirstie Hamilton