Ryanair 2004 Annual Report Download - page 46

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18 FAIR VALUES OF FINANCIAL INSTRUMENTS
Fair value is the amount at which a financial instrument could be exchanged in an arm’s length transaction between informed and
willing parties, other than as part of a forced liquidation or sale. The following methods and assumptions were used to estimate the
fair value of each material class of the group’s financial instruments:
• Cash and liquid resources, current portions of bank loans and overdrafts: carrying amount approximates to fair value due to the
short term nature of these instruments.
• Bank loans carrying fixed rates of interest: the repayments which Ryanair is committed to make have been discounted at the
relevant rates of interest applicable at March 31, 2004 and March 31, 2003, which wouldbepayable to a third party to assumethe
obligation.
•Off balance sheet interest rate contracts: discounted cash flow analyses have been used to determine the estimated amount
Ryanair would receive or pay to terminate the contracts. Discounted cash flow analyses are based on estimated future interest
rates.
•Off balance sheet currency forward and aircraft fuel contracts: a comparison of the contracted rate to the market rate for
contracts providing a similar risk management profile at March 31, 2004 and at March 31, 2003 has been made.
(Continued)
Notes
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