Accounting policies

As a result of the Group's adoption of IFRS, certain accounting policies have been amended. Prior year figures have been restated so as to provide meaningful comparison with the results for the year to 31 March 2006.

The major changes are as follows:

• derivative financial instruments are now held at fair value and any movements in value taken to the income statement;
• a charge is made in the income statement in respect of share-based payments based on the intrinsic value of awards at grant date;
• foreign currency items in the Group's income statement are converted at the actual exchange rate and not the year end rate;
• dividends declared after the balance sheet date are not recognised as a liability at the balance sheet date.

There have been no significant changes to 3i's valuation policy in the year. However, to comply with IFRS, discounts are no longer applied to market prices and quoted investments are valued at bid price rather than mid price.