IFRS accounting effects from change in functional currency
The accounts for these companies are therefore now recorded in USD, while the presentation currency for the Group remains NOK. The changes in functional currencies have no cash impact.
The companies changing functional currency will no longer have currency exchange effects, deriving from USD denominated monetary assets and liabilities, related to the “Net financial items”. Conversely, monetary assets and liabilities, denominated in other currencies than USD, may now generate such currency effects.
The changes have previously been announced in the Annual Report on Form 20-F for 2008 and the fourth quarter 2008 report.
According to IFRS, “Income tax” must be calculated based on the relevant tax currencies. For StatoilHydro ASA the tax currency remains NOK. As a consequence, currency fluctuations could now generate significant differences between the reported “Income before tax” (USD based) and the actual basis for calculation of “Income tax” (NOK based).
The reported income tax rate in the Group accounts, calculated from “Income before tax”, is thus expected to be more volatile going forward, while the nominal “Income tax” is unaffected. The currency effects reported in the “Net financial items” are expected to be less volatile due to these changes.
Without the changes in functional currency, the “Net financial items” for the Group would have been approximately NOK 10 billion higher in the first quarter 2009. The income tax related to this difference will be, however, booked to the Group accounts in the same period based on an average tax rate of approximately 25%.
For the first quarter 2009 the reported currency loss in the “Net financial items” for the Group is expected to be NOK 1.5 billion.
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