annual report 2009 - Aer Lingus

Financial Statements Aer Lingus Group Plc – Annual Report 2009532 Summary of significant accounting policies [continued]• Improvements to IFRSs (May 2008)– IFRS 5 Non-current Assets Held for Sale and Discontinued Operations– IFRS 7 Financial Instruments: Disclosures– IAS 1 Presentation of Financial Instruments– IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors– IAS 10 Events after the Reporting Period– IAS 16 Property, Plant and Equipment– IAS 18 Revenue– IAS 19 Employee Benefits– IAS 20 Accounting for Government Grants and Disclosures of Government Assistance– IAS 23 Borrowing Costs– IAS 27 Consolidated and Separate Financial Statements– IAS 28 Investment in Associates– IAS 29 Financial Reporting in Hyperinflationary Economies– IAS 31 Interest in Joint Ventures– IAS 34 Interim Financial Reporting– IAS 36 Impairment of Assets– IAS 38 Intangible Assets– IAS 39 Financial Instruments: Recognition and Measurement– IAS 40 Investment Property– IAS 41 AgricultureWhen the adoption of a new standard, an amendment to an existing standard or an interpretation, which is listed above, is deemedto have an impact on the financial statements or performance of the Group, its impact is described below:IFRIC 13 Customer Loyalty ProgrammesThis interpretation requires customer loyalty credits to be accounted for as a separate component of the sales transaction in which theyare granted. A portion of the fair value of the consideration received is allocated to the award credits and deferred. This is then recognisedas revenue in the period in which the award credits are redeemed. The Group maintains a loyalty points programme, the Gold Circle Club,which allows customers to accumulate points when they purchase flights. The points can then be redeemed for free flights, products andservices with Aer Lingus and its partners, subject to a minimum number of points being obtained. The Group has historically recorded aliability at the time of sale based on the costs expected to be incurred to supply free flights, products and services in the future. IFRIC 13has no specific provisions on transition, therefore, the Group has followed IAS 8 Accounting Policies, Changes in Accounting Estimatesand Errors and applied the changes retrospectively. The prior period financial information has therefore been restated.Under the new policy, consideration received is allocated between the flights sold and the points issued, with the consideration allocatedto the points equal to their fair value. Fair value of the points is determined by applying statistical analysis. The fair value of the pointsissued is deferred and recognised as revenue when the points are redeemed.As a result of the adoption of IFRIC 13, the following adjustments were made to the 2008 financial statements:As of 1 January 2008:Increase in deferred tax asset €1,168,000Increase in provisions €9,341,000Decrease in opening retained earnings €8,173,000As of 31 December 2008:Increase in deferred tax asset €1,463,000Increase in provisions €11,703,000Decrease in opening retained earnings €10,240,000For the year ended 31 December 2008:Decrease in revenues €2,362,000Increase in income tax credit €295,000Increase in loss after tax €2,067,000Increase in loss per share0.3 € cent per share