This excerpt taken from the ELN 6-K filed Aug 28, 2009.
1 BASIS OF PREPARATION
These unaudited condensed consolidated interim financial statements (the interim financial statements), which should be read in conjunction with our 2008 Annual Report, have been prepared by Elan Corporation, plc in accordance with IAS 34, Interim Financial Reporting (IAS 34), as adopted by the European Union. In addition, these interim financial statements have been prepared in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 and the related Transparency rules of the Irish Financial Service Regulatory Authority. They do not include all of the information required for full annual financial statements, and should be read in conjunction with our Consolidated Financial Statements as at and for the year ended 31 December 2008.
These interim financial statements are presented in U.S. dollars, which is the functional currency of the parent company and the majority of the group companies. They are prepared on the historical cost basis, except for certain financial assets and derivative financial instruments, which are stated at fair value.
The interim financial statements include the accounts of Elan and all of our subsidiary undertakings. All significant intercompany account balances, transactions, and any unrealised gains and losses or income and expenses arising from intercompany transactions have been eliminated in preparing the interim financial statements.
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results could differ materially from these estimates. In preparing these interim financial statements, the significant judgements made by management in applying the Companys accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Consolidated Financial Statements as at and for the year ended 31 December 2008.
The comparative figures included for the year ended 31 December 2008 do not constitute statutory financial statements of Elan within the meaning of Regulation 40 of the European Communities (Companies; Group accounts) Regulations, 1992. Statutory financial statements for the year ended 31 December 2008 have been filed with the Companies Office. The auditors report on those financial statements was unqualified.
We have incurred significant operating losses during the last three fiscal years and anticipate that we will continue to incur operating losses in 2009. However, our directors believe that we have adequate resources to continue in operational existence for the foreseeable future and that it is appropriate to continue to prepare our consolidated financial statements on a going concern basis.
These interim financial statements were approved by the directors on 26 August 2009.