Impact of new and revised International Financial Reporting Standards
Zurich, May 3, 2005 - Zurich Financial Services Group (Zurich) today published changes to its 2004 consolidated financial statements following the adoption of a number of revisions to International Financial Reporting Standards (IFRS), which became effective January 1, 2005. The main adjustments for Zurich result from the adoption of IFRS 4, which relates to the definition of an insurance contract. They primarily affect the accounting treatment of Zurich's Life Insurance business with impacts on both the Group's balance sheet and income statement.
Zurich has been reporting on an IFRS basis since 1997, and the changes resulting in the restatements are due to new and revised standards rather than the effects of full adoption of IFRS from other national accounting standards, as has been the case with many other organizations. The adoption of the new and revised IFRS requirements have resulted in a restatement of shareholders' equity from USD 22,181 million to USD 20,670 million as of December 31, 2004. Net income for 2004 was restated from USD 2,587 million to USD 2,466 million. Further detail is given in the table.
The adoption of the new and revised accounting policies does not change the Group's business fundamentals, its underlying profitability, or the regulatory capital position of its legal entities. The restatement largely reflects changes in the timing of profit recognition.
Opening net
impact
Jan 1, 2004 |
| Shareholders' equity, as previously reported in the 2004 Annual Report |
18,934 |
22,181 |
| Total IFRS 4 adjustments |
-1,320 |
-1,528 |
| Other IAS/IFRS adjustments |
15 |
17 |
| Total adjustments |
-1,305 |
-1,511 |
| Shareholders' equity, restated |
17,629 |
20,670 |
| |
December 31, 2004 |
March 31, 2004 |
| Net income, as previously reported in the 2004 Annual Report and 2004 Q1 Report |
2,587 |
730 |
| IFRS 4 adjustments |
-121 |
-86 |
| Net income after tax and minority interests, restated |
2,466 |
644 |
Note
There will be a conference call with a presentation for investors and analysts today at 6:30 p.m. CET (5:30 p.m. British Summer Time). For further information please refer to the Investor Relations section on our website www.zurich.com. A pdf-version of the presentation and some restated 2004 financial tables will also be available on www.zurich.com.
