7 November 2005
Impact of Transition to International Financial Reporting Standards (IFRS)
Ellex wishes to advise that it has completed a detailed review of the impact of the transition from Australian Accounting Standards to IFRS. The results of this review confirm that the impact of the change will be to increase Earnings Before Tax by approximately $2 million when compared to Earnings Before Tax of prior years.
This impact arises from two key areas:
- Ellex will no longer amortise goodwill which in the past resulted in a charge to the profit and loss of $1.1 million. Ellex will however be required to undertake an impairment test of the value of goodwill on its balance sheet on an annual basis.
- The capitalisation of research and development costs. Under the new standards Ellex expects to capitalise approximately $0.6 million in FY06 (net of amortisation of any amounts capitalised).
The balance of the total estimated impact of $2 million relates to a number of other small adjustments.
The detailed review of IFRS completed by Ellex has not been subject to external review by the company’s auditors, which will be done at the time of preparation of the financial statements for the half year to 31 December 2005.
Ellex Medical Lasers Limited designs, manufactures and markets a complete line of lasers used by ophthalmologists to preserve vision and fight blindness. With more than 10,000 systems installed worldwide, Ellex has evolved from its starting point as an OEM supplier of ophthalmic lasers 15 years ago, to direct marketing of its own branded products through subsidiaries in the United States and Japan and through a network of distributors in more than 50 other countries. Ellex maintains a strong emphasis on intellectual property and research into new and better treatments to manage and cure the leading causes of blindness.