Notes to the financial statements of the parent company

Accounting principles

Elisa Corporation’s financial statements have been prepared in accordance with the accounting principles based on Finnish accounting legislation. 

Items denominated in foreign currencies

Transactions denominated in foreign currencies are recorded at the rates of exchange prevailing on the dates of transactions. At year-end, assets and liabilities denominated in foreign currencies are valued at the average rate quoted by the European Central Bank at year-end.

Fixed assets

The carrying value of intangible and tangible assets is stated at cost less accumulated depreciation, amortisation and impairments. Internally generated fixed assets are measured at variable costs.

The difference between depreciation according to plan and total depreciation is presented under appropriations in the parent company’s income statement and the accumulated depreciation difference is presented under accumulated appropriations in shareholders’ equity and liabilities on the balance sheet. Depreciation according to plan is recognised on a straight-line basis over the useful lives from the original acquisition cost.

The useful lives according to plan for the different asset groups are:
Intangible rights 3–5 years
Goodwill 5–20 years
Other expenditure with long-term effects 5–10 years
Buildings and constructions 25–40 years
Machinery and equipment in buildings 10–25 years
Telephone exchanges 6–10 years
Cable network 8–15 years
Telecommunication terminals 2–4 years
Other machines and equipment 3–5 years


Inventories are stated at the lowest of variable cost, acquisition price or the likely disposal, or repurchase price. Cost is determined using a weighted average price.

Marketable securities

Investments in money market funds are recognised at the repurchase price. Investments in certificates of deposit and commercial paper are recognised at the acquisition cost, as the difference between the repurchase price and cost of acquisition is not significant.

Revenue recognition principles

Sales are recognised as income at the time of transfer and income from services is recognised once the services have been rendered.

Interconnection fees that are invoiced from the customer and paid as such to other telephone companies are presented as a deduction item under sales income (Finnish Accounting Standards Board 1995/1325).

The profit from the sale of business operations and fixed assets, subsidies received and rental income from premises are presented under other operating income. The loss from the sale of fixed assets is presented under other operating expenses. The profit or loss from the sale of shares is presented in financial income and expenses.

Research and development

Research costs are charged to expenses in the income statement. Product development expenses are recognised on the balance sheet from the date the product is technically feasible, it can be utilised commercially and future financial benefit is expected from the product. In other cases, development costs are recognised as an expense. Development costs previously recognised as expenses are not capitalised later.

Government grants for product development projects and the like are recognised under other operating income when the product development costs are recognised as annual expenses. If a government grant is associated with capitalised product development costs, the grant reduces the capitalised acquisition cost.

Future expenses and losses

Probable future expenses and losses related to the current or a prior financial period without corresponding income are recognised in the income statement. Such items are recognised in the balance sheet under provisions if a reliable estimate of the amount or timing of the obligation cannot be made. Otherwise the obligation is recognised in accruals.

Income taxes

Income taxes for the financial year are recognised in the income statement. No deferred tax liabilities or receivables have been recognised in the financial statements.

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