Adoption of IFRS standards

YIT changed over to IFRS (International Financial Reporting Standards) on January 1, 2005. Prior to the adoption of IFRS, YIT’s financial reporting was based on Finnish Accounting Standards (FAS).

As of 2005, the Interim Reports are drafted in accordance with IFRS recognition and measurement policies. The comparative figures for 2004 presented in the Interim Reports are also in line with IFRS.

Major effects of the adoption of IFRS

YIT Corporation’s IFRS comparative information for the 2004 financial year and a summary of the major changes were released as a stock exchange release on April 6, 2005. Due to revisions to IFRS standards, the comparative figures differ in some respects from the figures presented in that stock exchange release.

For YIT, the major effects of the transition to IFRS are related to the recognition method employed in the treatment of developer contracting. At the segmental level, these changes affect the financial figures of Construction Services. Significant changes in developer contracting include the elimination of “double net sales”, the change in the recognition of income on the basis of the percentage of completion and changes in the treatment of developer contracting in the balance sheet.

Another significant change is that the amortization according to plan of goodwill and goodwill on consolidation will be discontinued and replaced with impairment tests. On the basis of the tests carried out in 2004, there were no grounds for recognizing impairment. The transition to IFRS is an accounting measure and it has no material effect on the company’s business operations or cash flow.

Updated May 9, 2006
InvestorRelations@yit.fi