Adria Airways d.d. Annual Report 2005 A dria Airw a ys d.d. A ...

checked that it has the nature of cash.
• Cash denominated in foreign currency is converted to the domestic currency at the middle Bank of Slovenia exchange
rate on the day that it is received.
Capital
• Capital reflects the equity-based financing of the company, and from the company’s point of view entails its liabilities
to the shareholders. It is defined not only as the amounts that the shareholders originally invested in company, but
also the amounts generated during its trading.
• The total shareholders’ equity consists of called-up capital, the capital surplus, profit reserves and the capital revaluation
adjustments.
• Share capital is administered in the domestic currency.
Liabilities
• Liabilities may be either financial or operating liabilities, short-term or long-term.
• Short-term and long-term liabilities of all types are initially disclosed in the amounts recorded in the relevant documents,
under the assumption that the creditors require the repayment of the liabilities.
• Long-term financial investments denominated in foreign currency are converted into the domestic currency at the
prevailing exchange rate on the day that they are booked. The exchange rate difference in the period to the balance
sheet date is the result of the valuation of long-term financial liabilities as at the balance sheet date, and is disclosed
as the exchange rate difference on the tangible fixed assets for which the long-term liabilities were assumed in foreign
currencies.
• Operating liabilities denominated in foreign currency are converted to domestic currency on the day that they arise.
Any exchange rate difference that arises by the balance sheet date is treated as an item of financial revenues or financial
expenses.
• Before compiling the annual financial statements the company assesses the fair value of short-term operating liabilities
on the basis of contracts, the coordination of balances and other financial tools.
Recognition of revenues
• Revenues are recognised if increases in economic benefits during the accounting period are associated with increases
in assets or decreases in debts and the increases can be measured reliably.
• Sales revenues consist of the sale values cited in invoices and other documents for the services, merchandise and
material sold in the accounting period, provided that it can realistically be expected that they will be paid, minus all
discounts given at sale, and subsequently minus the value of returned quantities and discounts given subsequently.
• Revaluation operating revenues arise during the alienation of tangible fixed assets and intangible assets at a value
in excess of their book values, with allowance for a previous capital revaluation adjustment deriving from a previous
value gain in the assets.
• Financial revenues are revenues generated from investment activities. They arise in association with long-term and
short-term investments, and in association with receivables. They are recognised when statements of account are prepared,
irrespective of receipts, unless there is a substantiated doubt as to their size, the due repayment date or whether
they can be repaid. Interest is charged on a time proportion basis with regard to the principal outstanding and the
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Annual Report 2005
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