47153 AG Barr Annual Report 2025 AW4 SQ WEB - Flipbook - Page 156
A.G. BARR p.l.c. Annual Report and Accounts 2025
N OTE S TO TH E
ACCO U NT S
CO N TI N U ED
1. Accounting Policies continued
Provisions
A provision is recognised if, as the result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably and it is probable that
an outflow of economic benefits will be required to settle the obligation.
A restructuring provision is recognised when the Group has approved a detailed and formal restructuring plan which has been either announced or has commenced.
Future operating costs are not provided for.
Dividend distributions
Dividend distributions to the Company’s shareholders are recognised as a liability in the Group’s financial statements in the period in which the dividends are approved
by the Company’s shareholders.
Share repurchase programme
Any share repurchase programmes would result in the cancellation of repurchased shares and the transfer of the relevant permanent capital into a Capital Redemption
Reserve. The Capital Redemption Reserve is included in “Other reserves” within equity. Refer to Note 27.
Alternative performance measures
Alternative performance measures (APMs) are tracked by management to assess the Group’s operating performance and to inform financial, strategic and operating decisions.
These are, therefore, presented within the Annual Report and Accounts. Definitions of APMs and reconciliation to GAAP measures can be found in the Glossary on pages 192 to 195.
Adjusting items
The Group excludes adjusting items from its non-GAAP measures because of their size, frequency and nature to allow shareholders to better understand the elements of financial
performance in the year, so as to facilitate comparison with prior periods and to assess trends in financial performance more readily. These items are primarily non-operational.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make assumptions and estimates that affect the amounts reported for assets and liabilities as at the
statement of financial position date and the amounts reported for revenues and expenses during the year. Due to the nature of estimation, the actual outcomes may well
differ from these estimates.
The directors do not consider there to be any critical accounting judgements. The key sources of estimation uncertainty at the end of the reporting period that may have
a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are:
Estimates
Retirement benefit obligations
The determination of any defined benefit pension scheme surplus/obligation is based on assumptions determined with independent actuarial advice. The assumptions
used include discount rate, inflation, pension increases, salary increases, the expected return on scheme assets and mortality assumptions. The material estimations are
those for which a sensitivity analysis is provided in Note 26. The directors consider that those sensitivities provided in Note 26 represent the range of possible outcomes that
could reasonably be expected to occur in the next 12 months.
Sales related rebates and discounts
The Group agrees to pay customers various amounts in the form of sales related rebates and discounts. Accruals are made for each individual promotion or rebate based
on the specific terms and conditions of the customer agreement. Management make estimates on an ongoing basis to assess customer performance and sales volume to
calculate the total amounts earned to be deducted from revenue. Based on total rebate and discount spend in the year, 5% of spend would need to be omitted to result in
a material error in the value of accruals made at year end.
Assessment of impairment of goodwill and brands
Goodwill and brands have arisen from business combinations and all have indefinite useful lives and, in accordance with IAS 36 are subject to annual impairment testing.
The recoverable amount is assessed as the higher of the assets value in use or the fair value less costs of disposal. The directors consider there to be a key source of
estimation uncertainty in the MOMA cashflows. The assumptions used in the cashflow projections and associated sensitivities are set out in Note 10.
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