Foreign currency translation

Madina Akhtanova. Finance 3A

Significant Accounting Policies

Nature of operations

The Dolce Vita Company’s business is focused on manufacturing of confectionery. Our products are sold in 7 countries (Kazakhstan, Russia, Belarus, Kyrgyzstan, Uzbekistan, Turkey, Azerbaijan) primarily through retail operations including mass merchandisers, grocery stores, and department stores. Headquartered in Almaty, Kazakhstan.

Basis of Consolidation

These financial statements have been prepared in accordance with International Financial Reporting standards (IFRS) and issued by the International Accounting Standard Board (IASB) and with Kazakhstani law.

Financial statements have been prepared on an accrual basis under historical costs basis.

The Board of Directors approved the Consolidated Financial statements 2014 for issue on 18 February 2015.

Revenue

Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the company and the amount of the revenue can be measured reliably. Revenue is measured at the fair value of the consideration received net of sales taxes and discounts. Most revenue transaction represents sales of inventory. Revenue from the sale of goods is recognized when delivery took place and the transfer of risks and rewards of ownership has been completed. Interests are recognized using the effective interest method. Dividends are recognized when the shareholder’s right to receive payment is established.

Contract revenue and contract costs are recognized in the income statement by reference to the stage of completion of the contract activity at the end of reporting period.

Foreign currency translation

The financial statements of the Dolce Vita Company are measured in the functional currency, the currency of the primary economic environment in which it operates. The consolidated financial statements are presented in Kazakhstani tenge (KZT).

A foreign currency transaction should be recorded initially at the rate of exchange at the date of the transaction.

At each subsequent balance sheet date:

- Foreign currency monetary amounts should be reported using the closing rate

- Non-monetary items carried at historical cost should be reported using the exchange rate at the date of transaction

- Non-monetary items carried at fair value should be reported at the rate that existed when the fair values were determined

Foreign exchange differences are presented in the statement of profit or loss in the period.

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