Irish Life and Permanent has restated its interim results for 2004, causing net profits to slip from €163 million to €128 million.
Under new International Financial Reporting Standards (IFRS), which came into effect from January 1st, 2005, profit after tax came to €128 million. This compares to the previously stated the generally accepted accounting principle figure of €163 million.
The new statutory financial reporting rules split life assurance reporting into two elements: insurance contracts and investment contracts.
Insurance business is reported on an embedded value basis; investment is accounted for on an accruals basis.
This requires the write-off of fixed acquisition costs and according to Irish Life, it can produce "misleading outcomes" when reporting profits on long-term savings and pension business.
The majority of Irish Life & Permanent's business falls into the investment category under IFRS.
However, under European Embedded Value (EEV), adopted by the company from January 2005, net profit rose to €182 million. This includes the group's banking and other activities on an IFRS basis and its life activities on an EEV basis.
EEV was introduced by the life assurance industry in May 2004 in an attempt to improved the transparency and consistency of embedded value reporting across life companies.
Irish Life & Permanent's group finance director Peter Fitzpatrick said the restatement provided figures against which the company's interim 2005 results would be measured.