Open Joint Stock Company Gazprom

OAO GAZPROMNOTES TO THE IAS CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(In millions of Russian Roubles in terms of the equivalent purchasing power of the Rouble at31 December 2001, except as noted)4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—(Continued)InvestmentsLong-term investments, excluding bonds, are reflected at cost restated to the equivalentpurchasing power of the RR at 31 December 2000. Bonds are reflected at amortised cost. Provision forimpairment is only made where, in the opinion of the Group's management, there is a diminution invalue, which is other than temporary. On disposal of an investment, the difference between the netdisposal proceeds and the carrying amount is charged or credited to the consolidated statement ofoperations.Marketable securitiesMarketable securities are valued at the lower of cost restated to the equivalent purchasing powerof the Rouble at 31 December 2000 on the basis of indices included in Note 3, or market value.Accounts receivableAccounts receivable are carried at anticipated realisable value. An impairment estimate is madefor doubtful receivables based on a review of all outstanding amounts at the year end. This estimatereflects, inter alia, the payment record of specific debtors and management's perception of theeconomic risks and factors specific to customers operating in certain regions and markets. Bad debtsare written off in the year in which they are identified.InventoriesInventories are valued at the lower of net realisable value or weighted average cost restated tothe equivalent purchasing power of the RR at 31 December 2000 on the basis of indices included inNote 3.ProvisionsProvisions including provisions for environmental liabilities, are recognised when the Group hasa present legal or constructive obligation as a result of past events, it is probable that an outflow ofresources embodying economic benefits will be required to settle the obligation, and a reliable estimateof the amount of the obligation can be made.Impairment of assetsAt each balance sheet date management assess whether there is any indication that therecoverable value of the Group's assets has declined below the carrying value. When such a decline isidentified, the carrying amount is reduced to the recoverable amount. The amount of the reduction isrecorded in the consolidated statement of operations in the period in which the reduction is identified.Pension and other post-retirement benefitsMandatory contributions to the governmental pension scheme are expensed when incurred andare included within staff costs in the operating expenses. The cost of providing other immaterialdiscretionary pension payments and other post-retirement obligations (including constructive) isaccrued and charged to the consolidated statement of operations so as to spread the regular cost overthe service lives of employees.F-12