In order to make revenue recognition more predictable onwards and in line with the best industry practices, LSR Group adopts new accounting policy for real estate development revenue recognition.
According to the new policy revenue for the full value of the real estate already contracted is recognised on the date when commissioning certificate for the building is issued.
The exact text of the policy is as follows: “Sales may be contracted under share participation agreements, which cannot be unilaterally terminated. In such instances, the significant risks and rewards of ownership are considered to have been transferred to individual buyers when the construction is completed and commissioning certificate for the building is issued.”
To provide time for a smooth transition, this new policy will be implemented as of 1 January 2014, so it will affect IFRS statements for the first six months ending 30 June 2014, as well as future periods. The comparative periods will be restated if the effect is material.
Notes to Editors:
OJSC LSR Group is a diversified construction company operating in a number of complementary market segments. The company was founded in 1993. Its core business areas are production of building materials, panel construction and real estate development. The company unites business units for extraction and processing of aggregates, production and transportation of building materials, construction upon projects of leading Russian and foreign architects – from mass-market to elite residential properties. LSR Group's main operations are located in St. Petersburg, Leningrad region, Moscow, Moscow region, Yekaterinburg and Ural region. As of 31 December 2012 (according to Cushman & Wakefield Russia), the net sellable area of the projects in LSR Group’s real estate portfolio is equal to 8.7m m2 with the market value of RUB 120bn. In 2012, the sales revenue of LSR Group amounted to RUB 61,122m (IFRS) LSR Group is a public company, with its GDRs traded on the London Stock Exchange and its ordinary shares traded on MICEX-RTS.
For more information please contact:
LSR Group Press Service
Tel.: +7 812 314 10 44
Fax: +7 812 458 83 72