ADVA Adopts IFRS Accounting Rules

ADVA switches to IFRS, reports operating income of €8.5M compared with €7.8M as reported under US GAAP

April 20, 2005

2 Min Read

MUNICH and MAHWAH, N.J. -- ADVA Optical Networking today provided details on the conversion of its 2004 U.S. GAAP financial statements, which were published on March 10, 2005, into International Financial Reporting Standards ("IFRS") in accordance with new regulations for European-listed companies.

Overall, ADVA achieved an IFRS operating income of EUR 8.5 million in 2004 vs. EUR 7.8 million as reported under U.S. GAAP. IFRS net income for the year 2004 was EUR 7.2 million vs. EUR 6.7 million as reported under U.S. GAAP. IFRS-based pro forma operating income amounted to EUR 12.9 million in 2004 vs. EUR 12.3 million as based on U.S. GAAP, and ADVA achieved IFRS-based pro forma net income for the year of EUR 11.6 million vs. EUR 11.3 million as based on U.S. GAAP. The pro forma numbers are calculated prior to non-cash charges related to the stock option programs, amortization and impairment of goodwill and acquired intangible assets. The conversion of the financial statements did not impact U.S. GAAP reported revenues of EUR 102.1 million in 2004. Key IFRS standards which impact ADVA's 2004 financial statements relate to inventory valuation, the capital­ization of development expenses, and stock options.


ADVA provides its reviewed IFRS opening and closing balance sheets at January 1 and December 31, 2004, as well as annual and quarterly results for the year 2004, based on the assumption that the applicable IFRS / IAS standards at the time of preparation are still applicable on December 31, 2005. Changes of the currently-applicable standards by the International Accounting Standards Board (IASB) may result in changes to the 2004 IFRS financial statements published today. Hence, these financial statements will be considered as preliminary until December 31, 2005.


Starting with the release of ADVA's financial statements for the first quarter 2005 on May 10, 2005, key IFRS financial information will be provided in addition to the U.S. GAAP financial statements on a quarterly basis. ADVA will continue to apply U.S. GAAP as the primary accounting framework for 2005 quarterly reporting, and will provide 2005 financial guidance only in accor-dance with U.S. GAAP. In order to comply with recently-enacted legislation for European-listed companies, ADVA will start applying IFRS standards as primary accounting framework with the release of its annual report 2005 in 2006.

ADVA Optical Networking

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