SECURITIES PROSPECTUS

each unit. The production cost of each unit shall include all expenses in connection withthe acquisition of inventories.7.3. Goods purchased shall be recorded in account 41 "Goods" at purchaseprices.7.4. The analytical accounting records of materials shall be maintained usingcash method of accounting. Contractual prices shall be used as book prices.7.5. Stock number shall be a unit of inventories.7.6. Operations related to the procurement and acquisition of material resourcesshall be recognized in the accounting records without using account 15 "Procurementand Acquisition of Materials" and account 16 "Materials Cost Deviation".7.7. Transportation and procurement expenses shall be included in the actualproduction cost of material.7.8. Fittings, tools, fixtures with a useful life of less than one year shall berecognized as inventory in account 10 "Materials".7.9. Fixed assets valued at not more than 20,000 rubles per unit shall unit shallbe recognized as inventory in a separate subaccount of account 10 "Materials".8. Deferred Expense Accounting8.1. Expenses paid in this reporting period yet used by the Company in itsactivity during a certain period shall include the following expenses:• payments in connection with voluntary and mandatory property andemployee insurance;• costs in connection with the acquisition of copies of computer software;• expenses in connection with the acquisition of licenses to perform certainactivities;• expenses in connection with the leaves of future reporting periods;• other expenses related to future reporting periods.8.2. Deferred expenses shall be written off evenly during the period to whichthey relate. The duration of such period shall be determined as of the date on whichdeferred expenses are recorded in the accounting books.8.3. The life of deferred expenses whose useful life is not determined shall beestablished by the commission.8.4. Reserves for the future payment of employee vacation allowance, annuallong-service award, year-end bonuses, repair and other reserves for covering any othercontingencies shall not be established.9. Accounting for Settlements, Other Assets and Liabilities9.1. Accounts receivable shall be determined based on the prices established byagreements.227