NOTES
TO THE NOVARTIS GROUP CONSOLIDATED FINANCIAL STATEMENTS
187
CHANGES
IN US GAAP EQUITY
RESTATED
2004 US GAAP EQUITY AND NET INCOME
NOTES
TO THE US GAAP RECONCILIATION
34.1)
AVAILABLE-FOR-SALE MARKETABLE SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS:
Under IFRS, fair value changes which relate to the underlying movement
in exchange rates on available-for-sale debt securities have to be recognized
in the income statement. US GAAP requires the entire movement in the fair value
of these securities to be recognized in equity, including any part that relates
to foreign exchange movements. This resulted in an additional US GAAP income of
USD 278 million in 2005 (2004: expense USD 183 million).
Under IFRS, the Group remeasures its investment in privately held companies to
fair value. Under US GAAP such investments are accounted for at cost. A revaluation
gain of USD 24 million (2004: USD 64 million) was recorded in the IFRS equity
and reversed in the US GAAP equity.
The reconciliation
of the carrying value of marketable securities under IFRS and US GAAP is as follows:
The
components of available-for-sale marketable securities under US GAAP at December
31, 2005 and 2004 are the following:
