the company has adopted the amendment hellip in respect of financial guarantee contr 598047
Diageo plc (2007)
Notes to the company financial statements [extracts]
1. New accounting policies [extracts]
The company has adopted the amendment … in respect of financial guarantee contracts and credit insurance in these financial statements. Where the company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group, the company considers these to be insurance arrangements, and accounts for them as such. In this respect, the company treats the guarantee contract as a contingent liability until such time as it becomes probable that the company will be required to make a payment under the guarantee. As a result, adoption of the amendment … has not affected profit after taxation or shareholders funds.