Philips 2004 Annual Report Download - page 184
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The reader is referred to the notes to the consolidated financial statements based on US GAAP.
The differences between Dutch and US GAAP are disclosed in the notes below.
O
36 Income from operations
See note 2 to the consolidated financial statements based on US GAAP.
Depreciation and amortization
The higher depreciation and amortization of EUR 172 million in 2004 (2003: EUR 162 million)
between Dutch and US GAAP is caused by the fact that goodwill is no longer amortized under
US GAAP.
Depreciation of property, plant and equipment and amortization of intangibles are as follows:
2004 2003
Depreciation of property, plant and equipment 1,402 1,552
Amortization of software 145 164
Amortization of goodwill and other intangibles:
- Amortization of other intangible assets 150 151
- Amortization of goodwill relating to consolidated companies 220 283
- Impairment of goodwill 548 27
Total 2,465 2,177
Goodwill impairment under Dutch GAAP mainly related to MedQuist (2004: EUR 542 million;
2003: EUR 19 million).
O
37 Financial income and expenses
See note 3 to the consolidated financial statements based on US GAAP.
The lower financial income and expenses of EUR 183 million in 2004 is primarily related to a
reduction of the gain on the sale of Vivendi Universal shares (EUR 202 million). Because of the
increase in fair value of these shares in 2003, this amount was already recognized in that year’s
income of 2003, as a result of the reversal of previously recognized impairment charges. The
remainder arose from the change in fair value of other securities.
O
38 Income taxes
See note 4 to the consolidated financial statements based on US GAAP.
The difference in income taxes based on Dutch GAAP and income taxes based on US GAAP
relates to the different accounting treatment under Dutch GAAP of amortization of
tax-deductible goodwill, which is charged to income under Dutch GAAP and no longer
recognized under US GAAP.
The effect for 2004 is a tax benefit of EUR 36 million (2003: EUR 32 million).
183Philips Annual Report 2004
Notes to the consolidated financial statements of the Philips Group
all amounts in millions of euros unless otherwise stated