Hyperinflation adds €100m to Telekom Austria income
Telekom Austria is standing by its 2011 financial predictions, after revealing the application of hyperinflation accounting practices in Belarus will boost its coffers by €100 million.
The telco anticipates booking an impairment charge of €300 million in 2011 to cover the appreciation of assets as a result of the hyperinflation rules. However, the firm comes out on top because the value of those assets is tipped to increase by €400 million, so boosting the telco’s equity.
Four major audit companies initiated International Accounting Standard (IAS) 29 in Belarus late 2011, the first time the standard has been applied in Europe. It requires companies to issue financial statements in the terms of the measuring unit applicable on the day statements are released, and to adjust previous figures to allow meaningful comparison.
The boost to earnings has given Telekom Austria’s management confidence in their current 2011 forecasts, predicting EBITDA of up to €1.5 billion and revenue of around €4.5 billion.