Annual Report 1999 in PDF - Aer Lingus

AER LINGUS GROUP PLCStatement of Accounting PoliciesThe Group’s principal accounting policies are set out below. All of these policies have been applied consistently throughout theyear and the preceding year except where indicated.ABCDEFPrinciples of PreparationThe consolidated accounts have been drawn up in euros under the historical cost convention in accordance withaccounting standards generally accepted in Ireland and Irish statute, comprising the Companies Acts, 1963 to 1999 andthe European Communities (Companies: Group Accounts) Regulations, 1992. Accounting standards generally acceptedin Ireland in preparing accounts giving a true and fair view are those published by the Institute of Chartered Accountantsin Ireland and issued by the Accounting Standards Board.To facilitate comparability, certain amounts for 1998 have been re-classified to conform with the current year’spresentation.Basis of ConsolidationThe consolidated accounts include the accounts of the Company and all its subsidiaries made up to 31 December. Theresults of subsidiaries disposed of during the year are included in the consolidated accounts up to the effective date ofdisposal. The results of associated undertakings are included, using the equity method of accounting.Income RecognitionTurnover comprises revenues (excluding VAT and similar taxes, trade discounts and transactions between companies inthe Group) from passenger and cargo operations and airline services activities arising in the normal course of business.Revenues from passenger and cargo operations are recognised when transportation is provided. The value of sales made,for which transportation has not been provided at year-end, is included in creditors falling due within one year under thecaption "Passenger and Cargo sales in advance". Expired coupons are recognised as revenue on a systematic basis.Pension and Other Post-Retirement ObligationsThe Group provides pensions to substantially all employees through contributions to a variety of separately administeredschemes, the majority of which are defined benefit pension schemes.The amount charged to the profit and loss account in respect of such schemes and other post-retirement obligations isthe estimated regular cost of providing the benefits accrued in the year (as advised by professionally qualified actuaries),adjusted to reflect variations from that cost. The regular cost is calculated so that it represents a substantially levelpercentage of current and future pensionable payroll. Variations from regular cost are charged or credited to the profitand loss account over the estimated average remaining service lives of employees.TaxationIrish and overseas corporation tax payable is provided on taxable profits at current rates.Deferred taxation is provided, using the liability method, on material timing differences to the extent that it is expected tobecome payable in the foreseeable future.Tangible Fixed AssetsAll tangible fixed assets are stated at cost, net of accumulated depreciation.In prior years, aircraft which were financed in whole or in part in foreign currency, were regarded together with therelated liabilities as separate groups of assets and liabilities and accounted for in foreign currency. The amounts in foreigncurrency were translated into the reporting currency at rates ruling at the balance sheet date and the net differencesarising from the translation of aircraft net book values and related foreign currency liabilities were taken to reserves. Theaccounting policy was changed in 1999 and as a result all aircraft, regardless of how they are financed, are recorded ineuros at the date of acquisition. Gains or losses on foreign currency liabilities which finance aircraft are now dealt with inthe profit and loss account. The effect of the change in policy is set out in Note 1.Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost less estimated residual valueof each asset on a straight line basis over its expected useful life.29