annual report 2009 - Aer Lingus

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56 Financial Statements Aer Lingus Group Plc – Annual Report 2009Notes to the Consolidated Financial Statements [continued]2 Summary of significant accounting policies [continued]2.5 Property, plant and equipmentAll property, plant and equipment is stated at cost or deemed cost less depreciation. Cost includes expenditure that is directlyattributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flowhedges of foreign currency purchases of property, plant and equipment.Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it isprobable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measuredreliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost to theirresidual values over their estimated useful lives as follows:Useful livesResidual valuesFlight equipmentAircraft fleet and major spares– short haul aircraft 18 years 10% residual value– long haul aircraft 20 years 10% residual valueRotable spares 5-11 years NilModifications to leased aircraft Period of lease NilPropertyFreehold Principally 50 years NilLeasehold Period of lease NilEquipmentGround equipment 3-20 years NilOther equipment 2-10 years NilThe assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’scarrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimatedrecoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount.The costs of major airframe and engine maintenance checks on owned and finance leased aircraft are capitalised and depreciatedover the shorter of the period to the next check or the remaining life of the aircraft. On acquisition of new owned or finance leasedaircraft, the expected cost of initial major airframe and engine maintenance checks is separately identified and depreciated over theshorter of the period to the next check or the remaining life of the aircraft.2.6 Intangible assetsAcquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software.These costs are amortised over their estimated useful lives (three to five years) on a straight line basis. Costs that are directly associatedwith the production of identifiable and unique software products controlled by the Group, and that will probably generate economicbenefits exceeding costs beyond one year, are recognised as intangible assets. Computer software development costs recognised asassets are amortised over their estimated useful lives (not exceeding three years) on a straight line basis.Other costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred.2.7 Impairment of non-financial assetsAssets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that thecarrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceedsits recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and value in use. For the purposeof assessing impairment, assets are grouped at the lowest levels for which there are separately indentifiable cash flows (cash-generatingunits). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
Financial Statements Aer Lingus Group Plc – Annual Report 2009572 Summary of significant accounting policies [continued]2.8 Financial assets2.8.1 ClassificationThe Group classifies its financial assets in the following categories: loans and receivables, held to maturity investments and availablefor-salefinancial assets. The classification depends on the purpose for which the financial assets were acquired. Management determinesthe classification of its financial assets at initial recognition.(a) Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These areclassified as non-current assets. The Group’s loans and receivables comprise ‘loans and receivables’ and ‘trade and other receivables’in the statement of financial position.(b) Held to maturity investmentsHeld to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that theGroup has the positive intention and ability to hold to maturity. Were the Group to sell other than an insignificant amount of heldto maturity assets, the entire category would be reclassified as available-for-sale.Held to maturity investments are initially recognised at fair value plus transaction costs and are subsequently carried at amortisedcost using the effective interest method. They are recognised when the rights to receive cash flows from the investments have expiredor have been transferred and the Group has transferred substantially all risks and rewards of ownership.(c) Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the othercategories. They are included in non-current assets unless the investment matures or management intends to dispose of it within12 months of the end of the reporting period.2.8.2 Recognition and measurementRegular purchases and sales of financial assets are recognised on the trade-date – the date on which the Group commits to purchaseor sell the asset. Investments are initially recognised at fair value plus transactions costs for all financial assets not carried at fair valuethrough profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transactionscosts are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the investmentshave expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-salefinancial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables aresubsequently carried at amortised cost using the effective interest method.Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are analysedbetween translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amountof the security. The translation differences on monetary securities are recognised in profit or loss; translation differences on non-monetarysecurities are recognised in other comprehensive income. Changes in the fair value of monetary and non-monetary securities classifiedas available-for-sale are recognised in other comprehensive income.When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised in equity areincluded in the income statement as ‘gains and losses from investment securities’.Interest on available-for-sale securities calculated using the effective interest method is recognised in the income statement as partof finance income. Dividends on available-for-sale equity instruments are recognised in the income statement as part of finance incomewhen the Group’s right to receive payments is established.The available-for-sale fair value reserve remaining following the reclassification of debt securities previously classified as available-for-saleto loans and receivables is credited to the income statement using the effective interest method.
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annual report 2009
Page 3 and 4:
Financial HighlightsFor the year en
Page 5 and 6:
Chairman’s Statement Aer Lingus G
Page 11 and 12: Operating and Financial Review Aer
Page 13 and 14: Board of Directors Aer Lingus Group
Page 15 and 16: Corporate Social Responsibility Sta
Page 29 and 30: Directors’ Report Aer Lingus Grou
Page 35: Directors’ Report Aer Lingus Grou
Page 38 and 39: 36 Directors’ Report Aer Lingus G
Page 41 and 42: Remuneration Committee Report Aer L
Page 43 and 44: Remuneration Committee Report Aer L
Page 45 and 46: Independent Auditors’ Report Aer
Page 47 and 48: Financial Statements Aer Lingus Gro
Page 57: Financial Statements Aer Lingus Gro
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annual report 2009 - Aer Lingus

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