annual report 2009 - Aer Lingus

82 Financial Statements Aer Lingus Group Plc – Annual Report 2009Notes to the Consolidated Financial Statements [continued]24 Provisions for liabilities and charges [continued](a) Business repositioningA provision for business repositioning costs is recognised when a constructive obligation exists. The amount of the provision is basedon the terms of business repositioning measures, including employee severance and early retirement measures which have beencommunicated to employees. They represent the Directors’ best estimate of the cost of these measures, having regard to the currentstatus of negotiations. The amount provided during the period for business repositioning included €83.2m related to the 2009 CostReduction Programme; the balance related to the 2008 Early Retirement, Voluntary Severance and Migration Schemes. This provisionis expected to be materially utilised within the next two financial years.(b) Aircraft maintenanceA provision is made on a monthly basis for maintenance of aircraft held under operating leases. The provision will be utilised as themajor airframe and engine overhauls take place. Aircraft maintenance also includes provision for the costs to meet the contractualreturn conditions on these aircraft. Upon expiry of the lease any remaining balance is released or charged to the income statement.(c) Maintenance contractsA provision was made for the onerous element of contracts entered into as part of the disposal of the Group’s maintenance activitiesand was fully utilised during 2008.(d) OtherOther provisions relate mainly to the frequent flyer programme and post cessation of employment obligations to current and formeremployees. The frequent flyer provision is utilised when points are used or when they become non-redeemable. Points are redeemablefor a maximum of three years. The post cessation of employment obligations provision is accrued or utilised based on actuarialvaluations carried out on an annual basis.25 Deferred taxDeferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current taxliabilities and when deferred taxes relate to the same fiscal authority. The offset amounts are as follows:2009 2008€’000 €’000Deferred tax asset to be recovered after more than 12 months 52,080 43,071Deferred tax liability to be recovered after more than 12 months (47,325) (39,719)Deferred tax asset 4,755 3,352The gross movement on the deferred tax account is as follows:2009 2008€’000 €’000Deferred asset/(liability) at 1 January 3,352 (18,148)Income statement credit 11,969 12,176Tax (charged)/credited directly to equity (10,566) 9,324Deferred tax asset at 31 December 4,755 3,352