JPMorgan - KASE

development and/or the normal operation of a long-lived asset, except for certain obligations of
lessees. The Corporation has not yet evaluated the effect that FAS No 143 will have on financial
reporting.
Statement of financial accounting standards no. 144 (“FAS 144”)—accounting for the impairment
or disposal of long-lived assets
FAS 144, Accounting for the Impairment or Disposal of Long Lived Assets supersedes both FAS
No. 121 and the accounting and reporting provisions of APB Opinion No.30. FAS 144 retains the
fundamental provisions of FAS 121 for recognizing and measuring impairment losses on longlived
assets. FAS 144 retains the basic provisions of Opinion 30 on how to present discontinued
operations in the income statement but broadens that presentation to include a component of
an entity rather than a segment of a business. FAS 144 is effective for all fiscal years beginning
after December 15, 2001. Adoption of FAS 144 on January 2002 will not have a material impact
on the Corporation’s financial position or net income.
Consolidated statements of income and deficit reclassifications
Interest and other income is presented within revenue under Canadian GAAP, under the United
States GAAP this would be presented as a separate line item after operating income.
Interest and financing costs is presented within expenses under Canadian GAAP, under United
States GAAP this would be presented as a separate line item after operating income.
Unusual items as presented under Canadian GAAP would be included within expenses under
United States GAAP.
Consolidated statements of cash flow reclassifications
Under Canadian GAAP within “Repayment of debt and accrued interest” in Financing Activities is
$7,491 thousand of US Dollars of interest which would be included in Operating Activities under
United States GAAP.
22 Subsequent Events
The Corporation, through its operating subsidiaries in Kazakhstan, has disputed certain tax
assessments as disclosed in Note 16 to the financial statements.
The Corporation has been engaged in two court cases in Kazakhstan pertaining to the disputed
assessments. The first involved ShNOS and was approximately $8.8 million. ShNOS has successfully
argued its case at the first level of the court system in Kazakhstan and at the Supreme Court
level. There is a possibility that the Ministry of State Revenue may appeal to the ultimate
appellate level, the Supervisory Commission of the Supreme Court. No provision has been made
in the financial statements for this assessment.
The second case involved HKM and was for a total of approximately $8 million excluding any
potential fines or penalties, which may be approximately $2 million. HKM was successful at the
first level of the court system and was unsuccessful on the majority of the issues at the Supreme
Court level. HKM will appeal to the ultimate appellate level, the Supervisory Commission of the
Supreme Court. The Corporation has provided for $4.2 million of the $8 million in the March 31,
2002 financial statements. The Corporation continues to dispute this assessment, as it believes
that tax stability provisions of its Hydrocarbons Contracts establish that HKM is not subject to the
assessed taxes.
F-45