CzeCh airlines - České aerolinie

NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 2010
annual report 2010 | 56
When traffic documents are sold, the Company also recognizes fees related to the
sold traffic documents, the so-called “airport taxes”. The Company collects part of
these taxes for other entities (for example, airport authorities, taxation authorities).
The Company differentiates between taxes delivered at the moment of sale and taxes
delivered at the moment when the flight is realized. Both taxes are accounted for on
the balance sheet as payables and estimated items, respectively. Taxes not further
delivered are recorded as the Company’s income and are recognized in the period
in which the sale or the flight of the given traffic document is realized in accordance
with the conditions defined for the tax.
Revenues from the sale of goods and services are recognized on the supply date
or on a contractual basis. Gains arising from long-term production contracts are
recognized when the contract is completed and billed on the basis set out in the
underlying contract.
The Company further recognizes the so-called maintenance provisions in revenues
and expenses. The maintenance provisions represent amounts paid to the lessor
providing aircraft operating leases. These amounts are used by the lessor to cover
future overhauls of the aircraft. The Company recognizes these payments in the profit
and loss account in the period of payment as they are repeated on a regular basis.
The “Maintenance Provision Release” item represents the amount that was repaid
by the lessor to the Company in respect of the overhaul made by the Company or
paid for by the Company to the third party.
Estimates
The presentation of financial statements requires the Management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the balance sheet date and the reported amounts of revenues and expenses during
the reporting period. Management of the Company believes that the estimates and
assumptions used will not significantly differ from the actual results and outcomes
in the following reporting periods.
frequently or regularly and income or expenses arising from a change of accounting
method.
Related Parties
The Company’s related parties are considered to be the following:
▶ shareholders of which the Company is a subsidiary or an associate, directly or
indirectly, and subsidiaries and associates of these shareholders;
▶ members of the Company’s statutory and supervisory bodies, the Management
and parties close to such members, including entities in which they have a controlling
or significant influence; and
▶ companies with the same member of the Management.
Related party transactions and balances are disclosed in Note 26.
Subsequent Events
The effects of events which occurred between the balance sheet date and the date of
preparation of the financial statements are recognized in the financial statements in
the case that these events provide further evidence of conditions that existed at the
balance sheet date.
Where significant events occur subsequent to the balance sheet date, but prior to
the preparation of the financial statements, which are indicative of conditions that
arose subsequent to the balance sheet date, the effects of these events are disclosed,
but are not themselves recognized in the financial statements.
Extraordinary Expenses and Income
Extraordinary items are income or expenses that arise from events or transactions
that are clearly distinct from the ordinary activities of the Company, as well
as income or expenses from events or transactions that are not expected to recur