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Reporting alteration threatens to wipe 1bn [pounds sterling] from FTSE-100's profits.

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PositionACCOUNTING STANDARDS - Brief article

The move to international financial reporting standard IFRS2 will reduce the combined pre-tax profits of the FTSE 100 by at least 1bn [pounds sterling], according to a leading firm of actuaries.

Changes to the way employee share schemes are reported under the new regime will result in a two per cent reduction in profits, according to a survey by Lane Clark & Peacock (LCP).

The research focused on the annual accounts of 70 FTSE-100 firms that had produced comparative IFRS figures. Under the new standard, the cost of employee share plans will be based on the fair value of the benefits granted, rather than the actual cash cost of providing them. LCP thinks that this figure is likely to rise next year, as the charge ramps up in the first few years of operation.

The study of annual accounts also found that:

* Pearson's pre-tax profit of 171m [pounds sterling] under UK Gaap would drop by nearly 20m [pounds sterling] (12 per cent) under...

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