16. The information on financial investments
16.1. As financial investments the Company recognises the assets, which do not have material form and capable to bring economic gains (income) in the future in the form of interests, dividends or gain their cost (in the form of a difference between the sale price (repayment) and purchased cost) as a result of their exchange, use at repayment of obligations, mark-to-market value increases.
Analytical accounting of financial investments is done with breakdown of short-term and long-term financial investments. The investments produced with intention to receive income in more than one year are considered long-term financial investments. Other financial investments are short-term.
In accounting statements financial investments are represented with division depending on term of circulatuion (repayment) as short-term and long-term.
Financial investments on which it is possible to specify when due hereunder mark-to-market value, are recognized in the reporting at the end of accounting year on mark-to-market value by adjustment of their estimation on the previous reporting date. The Company produces the specified adjustment quarterly.
The difference between estimation of financial investments on mark-to-market value on the reporting date and the previous estimation of financial investments is displayed by the Company as other income or expenses. Thus, the gain of market value of investments is recognized under the account debit “Financial investments” and the account credit “Other income and expenses”, decrease — on debit accounts “Other income and expenses” and credit account “Financial investments”.
In case an item of financial investments earlier estimated on mark-to-market value, the reporting date of the mark-to-market value is not determined, such item of financial investments is recognized in the reporting at cost of its last estimation.
Financial investments on which mark-to-market value is not determined, are recognized in the historical cost accounting.
At the asset retirement, recognized to accounting as financial investments on which the mark-to-market value is determined, their cost is determined by the Company proceeding from last estimation.
Securities (stocks and bonds) are estimated at retirement on average original cost, which is determined by each type of securities.
Income on financial investments is recognized by the Company as other income.
16.2. Long-term financial investments are included in the notes to the accounting balance-sheet and in the profit and loss statement in tables 5.4.1, 5.4.2.
IDGC of Centre does not have any encumbered securities and other financial investments.
In the absence of prerequisites for depreciation, the Company does not create contingency reserve provision under financial investments.