ELMEC SPORT BULGARIA EOOD

“Elmec Sport Bulgaria” ЕООDReport and Financial Statements for the year ended 31 December 2008____________________________________________________________________Profit or Loss for the PeriodAll the debit and credit items, recognised for the period, should be included in a profit or loss account, unless astandard or clarification by the IFRS requires else.ExpensesThe enterprise accounts for the expenses for the activities by economic elements on a current basis and thereafter itreports by functional purpose with the objective of forming the size of the expenses by sectors and activities. Therecognition of the expenses for the current period is made when their corresponding receipts are assessed. Anexpense is recognised immediately in the account of the incomes, when the expense does not create a futureeconomic benefit, or when, and up to the extent to which the future economic profit does not meet therequirements, or will stop meeting the requirements of recognising an asset in the balance sheet.Expenses are accounted for by the principle of current assessment. They are appraised by the fair value of what hasbeen paid, or is about to be paid.RevenueRevenue is a gross flow of economic benefits for the period, created in the course of the customary activities of theenterprise, when such flows lead to an increase of the own capital, other than the increases related to theshareholders’ contributionsThe enterprise accounts for the revenue on a current basis from the customary activities, by kinds of activities.Revenue is evaluated by the fair value of the payment or remuneration which is received or subject to reception.Revenue recognition is conducted in keeping with the adopted accounting policy for the following kinds ofrevenue:Revenue from the sale of goods and products is recognised when all of the following conditions were fulfilled:• the enterprise has transferred to the buyer substantial risks and benefits of the ownership of the goods andproducts;• the enterprise does not keep ongoing participation in the management of the goods and products, insofaras it usually is associated with the ownership, or effective control on the goods and products sold, either;• the sum of the revenue can be valued reliably;• the economic benefits, related to the transaction, are likely to be obtained by the enterprise; and• the expenses made, or those about to be made in relation to the transaction, can be appraised reliably;revenue from services is recognised when the outcome of a transaction can be evaluated reliably, the revenuerelated to the transaction should be recognised subject to the stage of completeness of the transaction by the date ofthe balance sheet. The outcome of a transaction can be evaluated reliably when all the following conditions havebeen met:• the sum of the revenue can be evaluated reliably;• the enterprise will probably have economic benefits, related to the transaction;• the stage of completeness of the transaction by the date of the balance sheet can be evaluated reliably;and• the expenses made on the transaction as well as the expenses involved in the completion of thetransaction, can be evaluated reliably;The stage of completed contract is determined on the basis of the expenses accrued by the date of preparation ofthe statement, versus the expenses generally provided for under the contract.Net Share ProfitThe principal net profit per share is calculated by dividing the profit or loss for the period, which is subject todistribution among the owners of ordinary shares (numerator), by the average weighted number of the ordinaryshares held for the period (denominator).Effects of Exchange Rates VariationsThe functional currency of the enterprise is the Bulgarian Lev.The currency of presenting the financial statements is the Bulgarian Lev.The precision of the numbers in the financial statement is thousands of Bulgarian Leva.Foreign currency is any currency other than the functional currency of the enterprise.The transactions in foreign currency are entered initially in functional currency, by applying to the foreigncurrency sum the central exchange rate of the Bulgarian National Bank (BNB) for the respective currency, by thetransaction date. The exchange rate differences, arising in the settlement of monetary positions, or in recalculatingsuch monetary positions at exchange rates other than the ones under which they were filed or recalculated before,are accounted for as financial receipts or financial expenses for the period where they arise.The enterprise makes a revaluation of monetary positions in foreign currency by the date of the financial statementfor the period, and on a current basis monthly during the accounting period.12