BP 2008 Annual Report Download - page 135

23
BP Annual Report and Accounts 2008
Notes on financial statements
18. Auditor’s remuneration
$ million
Fees – Ernst & Young 2008 2007 2006
Fees payable to the company’s auditors for the audit of the company’s accountsa16 18 15
Fees payable to the company’s auditors and its associates for other services
Audit of the company’s subsidiaries pursuant to legislation 28 31 31
Other services pursuant to legislation 13 14 15
57 63 61
Tax services 2 2 1
Services relating to corporate finance transactions 2 1 2
All other services 5 8 9
Audit fees in respect of the BP pension plans 1 1 –
67 75 73
aFees in respect of the audit of the accounts of BP p.l.c. including the group’s consolidated financial statements.
Total fees for 2008 include $3 million of additional fees for 2007 (2007 includes $7 million of additional fees for 2006 and 2006 includes $5 million of
additional fees for 2005). Auditor’s remuneration is included in the income statement within distribution and administration expenses.
The tax services relate to income tax and indirect tax compliance, employee tax services and tax advisory services.
The audit committee has established pre-approval policies and procedures for the engagement of Ernst & Young to render audit and certain
assurance and tax services. The audit fees payable to Ernst & Young are reviewed by the audit committee in the context of other global companies for
cost-effectiveness. Ernst & Young performed further assurance and tax services that were not prohibited by regulatory or other professional
requirements and were pre-approved by the committee. Ernst & Young is engaged for these services when its expertise and experience of BP are
important. Most of this work is of an audit nature. Tax services were awarded either through a full competitive tender process or following an
assessment of the expertise of Ernst & Young compared with that of other potential service providers. These services are for a fixed term.
19. Finance costs
$ million
2008 2007 2006
Interest payable 1,319 1,433 1,196
Capitalized at 4.00% (2007 5.70% and 2006 5.25%)a(162) (323) (478)
Unwinding of discount on provisions 287 283 245
Unwinding of discount on other payables 103 –
1,547 1,393 986
aTax relief on capitalized interest is $42 million (2007 $81 million and 2006 $182 million).
Revised income statement presentation
With effect from 1 January 2008, the unwinding of the discount on provisions and on other payables is now included within finance costs. Previously,
it was included within other finance income or expense. This line item has now been renamed net finance income or expense relating to pensions
and other post-retirement benefits. This change does not affect profit before interest and taxation, profit before taxation or profit for the period in the
group income statement. For 2007 $283 million was reclassified from other finance income to finance costs (2006 $268 million).
134