Notes to the financial statements of the parent company

Elisa Corporation?s financial statements have been prepared following the accounting principles based on Finnish accounting legislation.

When the information for the financial year is compared with the previous financial year, it must be taken into account that mergers of Group companies with the parent company have taken place, which is the most important reason for the significant growth of turnover and expenses due to it and the balance sheet and liabilities. In addition, significant one-off items are included in the financial statements.

One-off items in the 2005 financial statements:

One-off items of the comparison year 2004:

Transactions denominated in a foreign currency are booked at the exchange rates quoted on the day that the transaction took place. On the day of closing, the accounts balance sheet items denominated in a foreign currency are valued at the average rate quoted by ECB at the closing date.

The acquisition cost deducted by accumulated depreciation according to plan and value adjustments is presented on the balance sheet as the book value of intangible and tangible assets. Self-manufactured and built fixed assets are valued as variable costs.

The difference between depreciation according to plan and total depreciation made is shown under appropriations in the parent company?s income statement and the accumulated depreciation difference is shown under accumulated appropriations in the shareholders? equity and liabilities in the balance sheet. The negative depreciation difference transferred from merged companies is recognised as income. Depreciation according to plan is calculated on the basis of financial service life as straight-line depreciation from the original acquisition cost.

Immaterial rights	3-5 years
Other expenditure with long-term effects	5-10 years
Buildings and structures	25-40 years
Machinery and equipment in buildings	10-25 years
Telephone exchanges	6-10 years
Cable network	8-15 years
Telecommunication terminals (rented to customers)	3-5 years
Other machines and equipment	3-5 years

Current assets are valued at variable costs, acquisition price or the likely assignment or repurchase price if it is lower. A weighted average price is used in the valuation of current assets.

The sale of performances is recognised as income at the time of assignment and income from services is booked once the services have been rendered.

Transit traffic payments that are invoiced from the customer and paid as such to other telephone companies are presented as a deduction item under sales income (Accounting Board 1995/1325).

The sales profit from the sales of business operations, shares and fixed assets, subsidies received and rental income from flats are presented under other operating income.

Research and development costs are handled as an annual expense according to the time they arise.

Future expenses and losses that are allocated to an ended or previous financial year and the realisation of which is considered certain or likely and income corresponding to which is not certain or likely are booked as expenses under the expense item in question on the income statement. On the balance sheet, they are presented under provisions for liabilities and charges when their exact amount or realisation date is not known. In other cases, they are presented under accruals and deferred income.

Given and received Group contributions and merger profits and losses have been booked under extraordinary items.

Income taxes belonging to the financial year are allocated and booked on the income statement. No deferred tax liabilities and receivables have been booked in the financial statements.