HSBC Holdings said yesterday its profit last year was 5.4 per cent lower under new International Financial Reporting Standards (IFRS). Under IFRS and excluding goodwill amortisation, HSBC's profit last year was restated to US$12.91 billion, down from US$13.65 billion under British rules. The restated earnings per share excluding goodwill amortisation was US$1.18. However, including goodwill amortisation, HSBC's restated profit under IFRS was still US$12.91 billion, representing a 9.1 per cent increase compared with British standards. Key impacts of the standards on the bank's financial results last year included goodwill amortisation, employee benefits and investment property. IFRS does not require companies to include goodwill amortisation in the profit and loss account. HSBC said in a statement that the effect of ceasing goodwill amortisation on operating profit for last year was US$1.81 billion. HSBC, one of the largest global employers, is also affected by the standards' new code on employee benefits, which requires pension fund assets to be assessed at fair value. The change in accounting has resulted in recognition of a pension obligation of US$6.47 billion at the end of last year. The effect on operating profit was to increase the charge by US$170 million. Under IFRS, HSBC's share-based compensation plans resulted in a reduction in operating profit, amounting to US$152 million. Meanwhile, investment property also needed to be measured at fair value and this led to a US$98 million increase in HSBC's operating profit. With effect from January 1 this year, HSBC was required to prepare its financial statements in accordance with the standards as endorsed by the European Union.