147 Vodafone Group Plc Annual Report 2026
Strategic report
Governance
Financials
Other information
New accounting pronouncements adopted on 1 April 2025 The Group adopted the following new policy on 1 April 2025 to comply with amendments to IFRS: − Amendments to IAS 21 ‘Lack of Exchangeability’. The amendment, which has been adopted by the UK Endorsement Board (‘UKEB’), did not have a material impact on the Group’s financial reporting. New accounting pronouncements to be adopted on or after 1 April 2026 The following amendments have been issued by the IASB and are effective on or after 1 January 2026. These amendments have been endorsed by the UKEB. − Amendments to IFRS 9 and IFRS 7 ‘Amendments to the Classification and Measurement of Financial Instruments’; − Amendments to IFRS 9 and IFRS 7 ‘Contracts Referencing Nature-dependent Electricity’; and − Annual improvements to IFRS Accounting Standards (Volume 11). The amendments are not currently expected to have a material impact on the Group’s financial reporting on adoption. However, the IFRS 9 and IFRS 7 amendments relating to ‘Classification and Measurement of Financial Instruments’ and ‘Contracts Referencing Nature-dependent Electricity’ may result in additional disclosures within the Group’s financial reporting. New accounting pronouncements to be adopted on or after 1 April 2027 The following new standards and amendments have been issued by the IASB but have not yet been endorsed by the UKEB except where noted: − IFRS 18 ‘Presentation and Disclosure in Financial Statements’, which has been endorsed by the UKEB; − IFRS 19 ‘Subsidiaries without Public Accountability: Disclosures’, which has been endorsed by the UKEB; − Amendments to IFRS 19 ‘Subsidiaries without Public Accountability Disclosures’; and − Amendments to IAS 21 ‘Translation to a Hyperinflationary Presentation Currency’. With the exception of IFRS 18, none of the newly issued standards or amendments are expected to have a material impact on the Group’s financial reporting upon adoption. IFRS 18 is expected to have a material impact on the Group’s financial reporting, particularly the Group’s consolidated income statement and the presentation of certain performance measures; the Group is undertaking a detailed assessment of the impacts.
1. Basis of preparation (continued) Income and expense items and cash flows are translated at the average exchange rates for each month and exchange differences arising are recognised directly in other comprehensive income. On disposal of a foreign entity, the cumulative amount previously recognised in the consolidated statement of comprehensive income relating to that particular foreign operation is recognised in profit or loss in the consolidated income statement. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated accordingly. The net foreign exchange gain recognised in the consolidated income statement for the year ended 31 March 2026 is €60 million (2025: €171 million loss; 2024: €272 million loss). The net gains and net losses are recorded within operating profit (2026: €16 million charge; 2025: €146 million charge; 2024: €110 million charge), financing costs (2026: €56 million credit; 2025: €1 million charge; 2024: €173 million charge) and income tax expense (2026: €20 million credit; 2025: €24 million charge; 2024: €11 million credit). Current or non-current classification Assets are classified as current in the consolidated statement of financial position where recovery is expected within 12 months of the reporting date. All assets where recovery is expected more than 12 months from the reporting date and all deferred tax assets, goodwill and intangible assets, property, plant and equipment and investments in associates and joint ventures are reported as non-current. Liabilities are classified as current unless the Group has the substantive right at the reporting date to defer settlement of the liability for at least 12 months after the reporting date. For provisions, where the timing of settlement is uncertain, amounts are classified as non-current where settlement is expected more than 12 months from the reporting date. In addition, deferred tax liabilities and post-employment benefits are reported as non-current. Inventory Inventory is stated at the lower of cost and net realisable value. Cost is determined on the basis of weighted average costs and comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.
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