Houston Chronicle: Shell's books to undergo major overhaul: “The Royal Dutch-Shell Group of Companies, Europe's second-largest oil company, said Monday it will adopt international accounting standards in 2005, a change that will cut its assets by $4.7 billion, in part because of changes in its pensions.” (ShellNews.net)

By BILL MURRAY

Bloomberg News

Nov. 23, 2004,

The Royal Dutch-Shell Group of Companies, Europe's second-largest oil company, said Monday it will adopt international accounting standards in 2005, a change that will cut its assets by $4.7 billion, in part because of changes in its pensions.

Total debt will rise by about $200 million under International Financial Reporting Standards, the company said in a statement. Net income this year will be lowered by about $100 million to recognize stock options, said Shell, which is based in London and The Hague.

Shell is changing the way it publishes earnings after the European Union ordered it and roughly 7,000 other publicly traded companies to start using the new standards in 2005 in an attempt to make corporate accounts more transparent throughout the 25-nation trading bloc. Much of the change in net assets comes from the way pension allocations will be made under the new accounting system, Shell said.

"It's basically a reduction in the pension prepayment," said Tim Morrison, Shell's controller, during a conference call.

Morrison said Shell will continue to follow Securities and Exchange Commission rules on oil and gas reserves. Shell lowered its estimates of proven oil and gas reserves four times this year, leading to investor lawsuits, fines in Britain and the United States and the loss of three senior executives.

To improve accountability, the company on Oct. 28 announced plans to end its almost century-old dual ownership, by combining the two boards and shares of its parent companies in Great Britain and Netherlands.

http://www.chron.com/cs/CDA/ssistory.mpl/business/energy/2914458