Annual Report 2009 - Isagen

ANNUAL REPORT 2009 / ISAGEN S.A. E.S.P.962. Basis of presentation of financial statementsThe financial statements considered of general purpose, shall bepresented to the Shareholders’ Meeting for its approval and are thebasis for the distribution of dividends and other appropriations.a) Accounting periodAccording to the Company’s bylaws, annual closing date isDecember 31.b) Monetary unitAccording to legal provisions, the monetary unit used by theCompany is the Colombian Peso.c) Classification of assets and liabilitiesAssets and liabilities are classified into current and non-current,according to their use or degree of realization or demand, in termsof time and value. Accordingly, current assets and liabilities areunderstood as such amounts that will be realizable or demandablewithin a term not longer than one year; for terms longer thanone year, they are classified as non-current.d) Relative importance and materialityRecognition and presentation of economic facts are made accordingto their relative importance or materiality.An economic fact is material when due to its nature or amount,knowing or not knowing it, considering the circumstances, couldsignificantly affect the decisions or assessments of the users ofsuch information.In the preparation and presentation of the financial statements,materiality was determined in relation to, among others, total assets,current and non-current assets, total liabilities, current andnon-current liabilities, equity and income, as the case may be.In general terms, an entry would be considered material if it exceeds5% of any of the above.3. Operating and/or administrativelimitations and deficienciesDuring 2009 and 2008, no operating or administrative limitationsand/or or deficiencies were found that would affect the normal accountingprocesses, or the consistency and reasonability of the accountingfigures.4. Main accounting policies and practicesFor its accounting entries and preparation of its financial statements,the Company observes the accounting principles generally acceptedin Colombia, defined by accounting regulations issued by theColombian General Accounting Office –CGN– and theSuperintendency of Domiciliary Public Utilities, through applicationof information systems. Chart of accounts for utilities and costs andexpenses unified system.5. Valuation rulesFollowing is a description of the main accounting policies and practicesadopted by the Company in accordance with note 4:a) Foreign currency translation and balancesTransactions in foreign currency are recorded at the applicableexchange rates in force on the date of the transaction. At the closeof each month, balances of assets accounts are adjusted to currentexchange rates on such date and the differences are carriedto income statement accounts. With regard to liability accounts,only exchange differences not ascribable to the cost of acquisitionof assets, that is, differences originated during the time such as-Contents Letter from the CEO Achievements2009Good GovernancePractices EvaluationCorporateManagementFinancial Management