“Intangible assets” is also not entirely clear but these can simply be sub-categorized as licenses and spectrum (i.e., Vodafone’s 3G and 4G licenses), computer software (which can be classed as an asset rather than an expense), and the helpfully monikered “other.” These assets are then amortized (depreciated) to give the current estimated value of 22 billion pounds. The amortization is purely subjective, although there should be an attempt to estimate the life of each asset.
Best of the rest
Further down, we have deferred tax assets at 3 billion pounds — but note there is also a deferred tax liability of 7 billion pounds under liabilities. These two offset each other and represent the balance of tax payable in the future. The timing of the payment of tax can be affected by certain asset and investment purchases, which can be used to offset tax, and the effect is weighted toward earlier years.
Finally, the equity section represents investors’ direct interests. All types of share capital are included. Called up and treasury shares represent employee share option schemes in this instance. Additional paid-in capital are all the other existing shares that you or I may hold. The 89 billion pounds of retained losses signifies of all of Vodafone Group Plc (ADR) (NASDAQ:VOD)’s profits and losses from inception to date. “Non-controlling interests” arise as some of the Group’s subsidiaries have such shareholders without a controlling interest.
Hopefully that whistle-stop tour was helpful, although there are many more terms in the notes that could be cleared up as well.
Both reports are completely free and can help you avoid the common novice investor mistakes.
The article A Look at Vodafone Group’s Balance Sheet originally appeared on Fool.com.
Barry James owns shares of Vodafone. The Motley Fool recommends Vodafone.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.