Annual report 2012

2. Basis for preparation

a. Statement of compliance

The accompanying separate financial statements of Telekom Slovenije have been prepared in accordance with International Financial Reporting Standards (IFRS) promulgated by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB (IFRIC), as adopted by the European Union.

The financial statements were approved for release by the Management Board on 26 March 2013.

The Company compiles consolidated financial statements for the Telekom Slovenije Group, which are included in the financial report of the Telekom Slovenije Group and are available at the registered office of Telekom Slovenije, d. d., at Cigaletova 15, Ljubljana, Slovenia. The consolidated financial statements were approved by the Management Board on 26 March 2013.

 

b. Basis for the preparation of financial statements

The financial statements have been prepared based on the going concern assumption. The financial statements have been prepared on a historical cost basis except for the measurement of financial assets available for sale and derivative financial instruments that are measured at fair value, and certain classes of property, plant and equipment, which are revalued to fair value in accordance with IAS 16 (refer to accounting policy 3.c. Property, plant and equipment).

 

c. Functional currency and foreign currency transactions

The separate financial statements of Telekom Slovenije are presented in euro (EUR), which is the functional and presentation currency of the Company. Items in separate financial statements are presented in euro, rounded to the nearest thousand.

Foreign currency transactions are translated into the functional currency at the exchange rate prevailing on the date of the transactions.

Monetary assets and liabilities in foreign currency are translated at the exchange rate of the functional currency prevailing at the date of the statement of financial position. All differences resulting from foreign currency translation are recognised in the income statement.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rates prevailing at the dates of the initial transactions. Non-monetary assets and liabilities measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

 

d. Use of estimates and judgements

The preparation of the financial statements requires management to make certain judgements, estimates and assumptions that impact the carrying values of the Company’s assets and liabilities and the disclosure of contingent items at the reporting date and the reported amounts of income and expenses for the period then ended.

Future events and their effects cannot be perceived with certainty. Accordingly, the accounting estimates made require the exercise of judgment and those used in the preparation of the financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Actual results may differ from those estimates. The formulation of estimates and related assumptions and uncertainties are discussed in individual items of segment 3. Summary of significant accounting policies.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Management’s judgments include but are not limited to:

  • depreciable lives and residual values of property, plant and equipment and intangible assets,
  • fair value of land, buildings and cable lines,
  • allowances for inventories and doubtful debts,
  • provisions and contingent liabilities,
  • network interconnection, and
  • investments.

 

e. Change in accounting policies

Company's accounting policies have not changed over  the previous period.