annual report 2009 - Aer Lingus
annual report 2009 - Aer Lingus 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
Financial Statements Aer Lingus Group Plc – Annual Report 20098325 Deferred tax [continued]The movement in deferred tax assets and liabilities during the period, without taking into consideration the offsetting of balanceswithin the same tax jurisdiction, is as follows:Deferred tax assetsProvisions Tax losses Total€’000 €’000 €’000At 1 January 2008 4,401 21,417 25,818Credited to the income statement 6,014 2,156 8,170At 31 December 2008 10,415 23,573 33,988Credited to the income statement 5,527 12,565 18,092At 31 December 2009 15,942 36,138 52,080Deferred tax liabilitiesAcceleratedtaxdepreciationDerivativefinancialinstrumentsAvailablefor-salereserve Other Total€’000 €’000 €’000 €’000 €’000At 1 January 2008 37,889 (2,641) 564 8,154 43,966Charged/(credited) to the income statement 1,481 2,606 – (8,093) (4,006)(Credited)/charged directly to equity – (9,048) (369) 93 (9,324)At 31 December 2008 39,370 (9,083) 195 154 30,636Charged to the income statement 6,123 – – – 6,123Charged/(credited) directly to equity – 10,756 (41) (149) 10,566At 31 December 2009 45,493 1,673 154 5 47,325Deferred tax (charged)/credited to equity during the period is as follows:2009 2008€’000 €’000Fair value reserves in shareholders’ equity– Cash flow hedging reserve (10,756) 9,048– Revaluation reserve on available-for-sale financial assets 41 369Share-based payment reserve 149 (93)(10,566) 9,324The Group is satisfied, based on expected future performance, that there is a reasonable basis on which to recognise the deferredtax assets.
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Financial Statements <strong>Aer</strong> <strong>Lingus</strong> Group Plc – Annual Report <strong>2009</strong>8325 Deferred tax [continued]The movement in deferred tax assets and liabilities during the period, without taking into consideration the offsetting of balanceswithin the same tax jurisdiction, is as follows:Deferred tax assetsProvisions Tax losses Total€’000 €’000 €’000At 1 January 2008 4,401 21,417 25,818Credited to the income statement 6,014 2,156 8,170At 31 December 2008 10,415 23,573 33,988Credited to the income statement 5,527 12,565 18,092At 31 December <strong>2009</strong> 15,942 36,138 52,080Deferred tax liabilitiesAcceleratedtaxdepreciationDerivativefinancialinstrumentsAvailablefor-salereserve Other Total€’000 €’000 €’000 €’000 €’000At 1 January 2008 37,889 (2,641) 564 8,154 43,966Charged/(credited) to the income statement 1,481 2,606 – (8,093) (4,006)(Credited)/charged directly to equity – (9,048) (369) 93 (9,324)At 31 December 2008 39,370 (9,083) 195 154 30,636Charged to the income statement 6,123 – – – 6,123Charged/(credited) directly to equity – 10,756 (41) (149) 10,566At 31 December <strong>2009</strong> 45,493 1,673 154 5 47,325Deferred tax (charged)/credited to equity during the period is as follows:<strong>2009</strong> 2008€’000 €’000Fair value reserves in shareholders’ equity– Cash flow hedging reserve (10,756) 9,048– Revaluation reserve on available-for-sale financial assets 41 369Share-based payment reserve 149 (93)(10,566) 9,324The Group is satisfied, based on expected future performance, that there is a reasonable basis on which to recognise the deferredtax assets.
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