FINANCIAL STATEMENTS 2010 - Finnlines

PARENT COMPANY ACCOUNTING PRINCIPLES 2010
The financial statements are prepared in conformity with the
Finnish Accountancy Act and other regulations and provisions in
force in Finland.
REVENUES
Revenues comprise sales income and exchange rate differenc-
es related to sales, excluding discounts and indirect sales taxes
such as VAT.
OTHER OPERATING INCOME
Other operating income includes profits on the sale of property
and other fixed assets as well as other regular income not directly
related to the company's sales, such as rents and leases.
FOREIGN CURRENCY ITEMS
Receivables and payables denominated in foreign currencies
are valued at the exchange rates prevailing on the balance sheet
date. Exchange rate differences on accounts receivable are rec-
ognised under revenue and exchange rate differences on ac-
counts payable under operating expenses. Exchange rate dif-
ferences on financing operations are recognised under financial
items.
DERIVATIVE FINANCIAL INSTRUMENTS
The realised gains and losses arising from derivative financial
instruments such as forward foreign exchange and option con-
tracts and currency swaps are recognised under financial items.
The interest received or payable under derivative financial instru-
ments used to hedge the company against interest rate risks is
accrued over the duration of the contract and recorded as an ad-
justment to the interest income or expenses of the designated as-
set or liability.
Finnlines also covers itself against changes in fuel prices by
including bunker clauses in its freight contracts.
FIXED ASSETS AND DEPRECIATION
Fixed assets are capitalised to their direct acquisition cost ex-
cluding depreciation and other deductions, along with any revalu-
ations allowed by local accounting practices. Fixed assets sub-
ject to wear and tear are depreciated according to plan based
on the economic life span of the asset and its estimated residual
value.
Depreciation periods:
Vessels 30-35 years
Buildings 10-40 years
Constructions 5-10 years
Stevedoring machinery and equipment 5-25 years
Other machinery and equipment 3-10 years
Other long-term expenditure 3-20 years
Second-hand vessels are depreciated over their estimated eco-
nomic service life.
LEASING
56 FINNLINES PLC Financial Statements 2010 (figures in EUR thousand, if not stated otherwise)
Leasing payments are recognised as expenses regardless of the
form of leasing.
INVENTORIES
Vessel stocks of fuel, lubricating oil, materials, provisions and
sales items are recognised under stocks. Stocks are valued on
a first-in, first-out basis at their direct acquisition cost or lower
probable net realisable value.
FINANCIAL ASSETS
The part of the financial assets that have been invested in money
market instruments are included in the financial assets in the bal-
ance sheet. The financial assets with a maturity longer than one
year, are valued at the lower of acquisition cost or fair value on
the balance sheet date.
PENSION COSTS
Pension costs are charged to the profit and loss account accord-
ing to the local practice. The entire uncovered pension liability is
recorded as an expense and liability.
EXTRAORDINARY ITEMS
Extraordinary income and expenses are group contributions re-
ceived and given.
PROVISIONS
Expenses and losses that no longer accrue corresponding reve-
nues in the foreseeable future and that the company is committed
or obliged to settle and whose monetary value can reasonably be
assessed are recognised as expenses in the profit and loss ac-
count, and included as a provision in the balance sheet.