BT Group PLC (LON:BT.A) expects the adoption of the IFRS 16 accounting rules to have a positive impact earnings for the 2020 fiscal year.
IFRS 16 came into effect for reporting periods after January, changing the way retailers can account for the costs of renting their premises.
The rules mean retailers now need to include leasing obligations in annual statements of assets and liabilities.
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BT said it expects IFRS 16 to add £700mln to earnings (EBITDA) in 2020 with no impact on revenue or cash flow.
The company will report its financial statements under the new accounting standard from the first quarter of 2020.
The group said it will not restate its prior year results using IFRS 16 but revealed the estimated impact the rules would have had on key performance indicators for the 2019 fiscal year.
Under IFRS 16, pro forma EBITDA would increase by £700mln in 2019 because the operating lease expense is replaced by interest expense and depreciation.
Net debt rises to £16.6bn-17.6bn from £11.0bn due to the recognition of lease liabilities by lessees.
All other KPIs, including revenue, cash flow and capital expenditure, remain unchanged.
The update from BT comes a day after WM Morrison Supermarkets PLC (LON:MRW) revised its 2018 pre-tax profit before exceptionals down by £10mln to £396mln to incorporate the IFRS 16.
READ: Morrisons revises 2018 profits lower after adopting new accounting rules
The weaker profits reflected £103mln less in rent, an extra £58mln in depreciation and a further £55mln in finance costs that weren't reported previously.