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Notes to consolidated financial statements

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Notes to consolidated financial statements

    Notes to the Consolidated Financial Statements for the Year Ended 31 December 2009

    Instructions:

     This document contains general information and the application of the contents to specific cases will depend on particular circumstances. Deloitte does not provide accounting, investment, legal, tax or other professional advice or services through this document. This document is not a substitute for such professional advice or services, and it should not be acted on or relied upon or used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect you or your business, you should consult your professional advisor. Deloitte accepts no responsibility for any losses sustained by any person as a result of placing reliance on the information presented in this document;

     This version is general and extensive, unnecessary parts may be omitted in specific cases; If the relevant disclosure section is not relevant for the Company, no comments need to be provided on this matter (e.g., the Company has no pledged assets) and the relevant section can be deleted;

     Text in bold + italics represents instructions;

     Slashes represent multiple options;

     Dots in the text represent space for filling in information;

     Most of the tables are linked to the financial statements, i.e., it is necessary to check whether data from the table agrees with the financial statements;

     It is necessary to modify the standard wording for a limited liability company, because the notes have been prepared primarily in respect of joint stock companies;

     If a table can be replaced with a note disclosure of the same informative value and the note disclosure is shorter, please delete the table and use the note disclosure; Comment on all material and non-recurring items;

     Remember to indicate the Company‟s name in the footer and to update the table of

     contents;

     If the Group used the profit and loss account structured by the function of expense/income method („ucelove cleneni‟), then the notes always need to include the profit and loss account structured by the nature of expense/income method („druhove cleneni‟).

    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

    FOR THE YEAR ENDED 31 DECEMBER 2009

    Name of the Parent Company: .......…………….......................

    Registered Office: ......................……………........

    Legal Status: Joint stock company/Limited liability company

    Corporate ID: ...................……………...........

     GROUP 1

Notes to the Consolidated Financial Statements for the Year Ended 31 December 2009

    TABLE OF CONTENTS

    1. GENERAL INFORMATION ....................................................................................................... 4 1.1. INCORPORATION AND DESCRIPTION OF THE CONSOLIDATING ENTITY (HEREINAFTER ALSO THE

    “PARENT COMPANY”) ...................................................................................................................... 4 1.2. YEAR-ON-YEAR CHANGES AND AMENDMENTS TO THE REGISTER OF COMPANIES .............................. 4 1.3. ORGANISATIONAL STRUCTURE OF THE PARENT COMPANY ................................................................ 4 2. DEFINITION OF THE CONSOLIDATION ENTITY (HEREINAFTER ALSO THE

    “GROUP”) ...................................................................................................................................................... 5 2.1. SUBSIDIARIES .................................................................................................................................. 5 2.2. SHARES IN ASSOCIATES ................................................................................................................... 6 2.3. JOINTLY CONTROLLED ENTITIES ...................................................................................................... 6 2.4. BOARD OF DIRECTORS AND SUPERVISORY BOARD OF THE PARENT COMPANY ................................... 6 3. BASIS OF ACCOUNTING AND GENERAL ACCOUNTING PRINCIPLES........................... 8 3.1. SCOPE OF CONSOLIDATION AND CONSOLIDATION METHOD ............................................................... 8 3.2. FULL CONSOLIDATION METHOD....................................................................................................... 9 3.2.1. Description of the Full Consolidation Method .............................................................................. 9 3.2.2. Stages of the Full Consolidation Method ...................................................................................... 9 3.3. CONSOLIDATION USING THE EQUITY METHOD OF ACCOUNTING ...................................................... 12 3.3.1. Description of Consolidation using the Equity Method of Accounting ......................................... 12 3.4. PROPORTIONATE CONSOLIDATION.................................................................................................. 13 3.4.1. Tangible Fixed Assets ................................................................................................................ 14 3.4.2. Intangible Fixed Assets .............................................................................................................. 15 3.4.3. Patents and Trademarks ............................................................................................................ 16 3.4.4. Goodwill ................................................................................................................................... 16 3.4.5. Non-Current Financial Assets .................................................................................................... 16 3.4.6. Current Financial Assets ........................................................................................................... 17 3.4.7. Derivative Financial Transactions ............................................................................................. 18 DERIVATIVE FINANCIAL TRANSACTIONS ...................................................................................................... 18 3.4.8. Inventory ................................................................................................................................... 21 3.4.9. Receivables ............................................................................................................................... 21 3.4.10. Trade Receivables ..................................................................................................................... 22 3.4.11. Loans ........................................................................................................................................ 22 3.4.12. Reserves .................................................................................................................................... 22 3.4.13. Foreign Currency Translation ................................................................................................... 22 3.4.14. Finance Leases .......................................................................................................................... 23 3.4.15. Taxation .................................................................................................................................... 24 3.4.16. Impairment ................................................................................................................................ 25 3.4.17. Borrowing Costs ........................................................................................................................ 25 3.4.18. Government Grants ................................................................................................................... 25 3.4.19. Revenue Recognition ................................................................................................................. 26 3.4.20. Use of Estimates ........................................................................................................................ 26 3.4.21. Extraordinary Expenses and Income .......................................................................................... 26 3.4.22. Year-on-Year Changes in Valuation, Depreciation or Accounting Policies ................................. 26 3.4.23. Other Matters ............................................................................................................................ 27 3.4.24. Cash Flow Statement ................................................................................................................. 27 4. ADDITIONAL INFORMATION ON THE CONSOLIDATED BALANCE SHEET AND

    PROFIT AND LOSS ACCOUNT................................................................................................................. 28 4.1. CONSOLIDATION ............................................................................................................................ 28 4.1.1. Proportionate Consolidation...................................................................................................... 28 4.1.2. Disposal of Subsidiary ............................................................................................................... 28 4.1.3. Acquisition of Subsidiary ........................................................................................................... 29 4.2. INTANGIBLE FIXED ASSETS ............................................................................................................ 29 4.2.1. Internally Generated Intangible Fixed Assets ............................................................................. 31 4.3. TANGIBLE FIXED ASSETS ............................................................................................................... 31 4.3.1. Fixed Assets Pledged as Security ............................................................................................... 34 4.3.2. Assets Held under Finance and Operating Leases ...................................................................... 34

     GROUP 2

Notes to the Consolidated Financial Statements for the Year Ended 31 December 2009

    4.4. ACCOUNTING FOR GOODWILL ARISING ON CONSOLIDATION ........................................................... 35 4.5. NON-CURRENT FINANCIAL ASSETS ................................................................................................ 35