Vodafone said today that new international accounting rules would mean a slightly lower cashflow forecast for the year to March 2005.
But the world's largest mobile phone company noted it would also no longer have to amortise billions of pounds of goodwill, increasing reported profit attributable to shareholders by £6.8 billion sterling.
Under the new accounting rules, Vodafone expects free cashflow at "slightly below" £7 billion , rather than free cashflow of "around" £7 billion under UK GAAP rules, it said in a statement.
From 2005, most of the 7,000 European stock exchange-listed companies have to adopt International Financial Reporting Standards (IFRS) for their group accounts to replace the different standards now used in Europe.
Analysts believe Vodafone's fundamental valuation will remain unchanged by IFRS, although some have forecast that reported earnings per share (EPS) and operating profits would be hit hardest over the next two fiscal years because of the need to report extra deferred tax and licence amortisation.
Analysts are forecasting that reported EPS in the year to March 2006 could be reduced by up to about 8 per cent, and dealers said they had heard forecasts were being cut.