Annual report - HSE

5.5.4 Currency reports
5.5.4.1 Functional and presentation currency
The consolidated financial statements contained in this Report are presented in euro (EUR)
without cents. The euro has been the functional and presentation currency of the Group.
Due to the rounding of amounts, minor but insignificant deviations exist in the tables.
5.5.4.2 Foreign currency translation
Transactions expressed in foreign currency are translated into the relevant functional
currency at the exchange rate applicable on the date of transaction.
Cash and liabilities expressed in a foreign currency at the end of the reporting period are
converted into functional currency at then applicable exchange rate.
Positive or negative foreign exchange differences are differences between amortised cost
in the functional currency at the beginning of the period, which is repaired for the amount
of effective interest and payments during the period, as well as amortised cost in foreign
currency converted at the exchange rate at the end of the period. Non-cash assets and
liabilities expressed in foreign currency and measured at fair value are converted in the
functional currency at the exchange rate on the date when the amount of fair value is
determined. Exchange differences are recognised in consolidated income statement using
net principle.
In translation of financial statements of subsidiaries abroad, whose functional value is not
equal to presentation value of the Group, the following exchange rates are used:
• assets and liabilities (except equity) translated at the exchange rate on the reporting date,
• equity at initial exchange rate, and
• revenue and expenses at average exchange rate in the reporting year.
5.5.5 Use of assessments and judgements
The preparation of consolidated financial statements requires that the management forms
certain assessments and assumptions which affect the disclosed amounts of assets and
liabilities, revenue and expenses and disclosures of contingent assets and liabilities in the
reporting period.
Assessments and judgements are based on past experience and other factors that are
considered reasonable in the given circumstances and on the basis of which the judgements
on the carrying amount of assets and liabilities are expressed. Since the assessments
and assumptions are subject to subjective judgement and certain level of uncertainty,
subsequent actual results can differ from assessments. The assessments are examined
on regular basis. Changes in accounting estimates are recognised in the period in which
the assessments were changed if the change affects only that period or in the period of
change and in future periods in case the change affects future periods..
Assessments and assumptions are present at least at the following judgements:
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Annual Report HSE 2012
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• assessment of useful life of amortisable assets (disclosure 5.5.8.1, points 1 and 2);
• test of impairment of assets (disclosure 5.5.8.1, points 1, 2 and 3);
• assessment of fair value of derivatives (disclosure 5.5.8.8.3 and 5.5.8.8.4);
• assessment of realisable values of receivables (disclosure 5.5.8.8.1);
• assessment of net realisable value of inventories (disclosure 5.5.8.1, point 5);
• assessment of provisions for jubilee and termination benefits (disclosure 5.5.8.1, point
10);
• assessment of other provisions (disclosure 5.5.8.1, point 11); and
• assessment of contingent liabilities and assets (disclosure 5.5.8.1, point 18).