From January 01, 2007 "Aeroflot - Russian Airlines" changes over to the method of revenue recognition at delivery. At present the revenue from sales of air services is recognized upon issue of traffic documents.
The change-over to the revenue recognition at delivery has been caused by the accounting requirements and is supported by appropriate technical facilities. The Company's current accounting policy for the accounting according to Russian standards prescribes to recognize revenue from sales of different air services irrespective of the payment form in the course of registration of the Company's air tickets and air freight bills.
When changing over to the new recognition method a part of profits relating to air services of 2007 will be included into the profits of 2006, which might influence the profit margin from sales of air services in 2007.
The predictable decrease in revenue position and increase in the amount of accounts payable in the Company's accounting statements for 2007 can affect the Company's net assets, which will be caused not by changes in economical conditions, but by the peculiarities of bookkeeping according to Russian standards and one-time effect of change in methodology.
Change of this methodology will not affect the indexes of financial statement for 2007 according to international standards.
"Aeroflot - Russian Airlines", OJSC is based in Moscow, Russia, Sheremetyevo Airport. The company was founded in 1923. It is the largest carrier on the international and domestic lines, which accounts for 39% of international and 11% of domestic air transportation market in Russia. Aeroflot is the member of Sky Team global airline alliance, which has been acknowledged the world's best airline alliance by the readers of Global Traveler Magazine. In 2005 the airline carried 6.8 million passengers to 89 cities of 47 countries around the world. The net profit of the company in 2005 amounted to 6.032 billion RUR. Aeroflot makes 302 daily flights served by the fleet consisting of 85 aircrafts. You can learn more about Aeroflot on the Web at: www.aeroflot.ru, www.aeroflotbonus.ru and www.skyteam.com