Ryanair 2004 Annual Report Download - page 64

(iv) Pensions
Under Irish and UK GAAP, plan assets are valued on the basis of the discounted present value of expected future income. US GAAP
requires that plan assets are valued by reference to their market value. Under Irish and UK GAAP, pension costs for defined benefit
plans are assessed in accordance with the advice of independent actuaries using assumptions and methods which produce the
actuaries’ best estimates of the cost of providing the relevant pension benefits. US GAAP requires the use of the projected unit credit
method and the matching of the projected benefit obligation against the fair value of the plan’s assets, as adjusted to reflect any
unrecognised obligations or assets. Under Irish and UK GAAP, the measurement of plan assets and obligations may be based on the
most recent actuarial valuation. Under US GAAP, calculations must be made as of the date of the financial statements or a date not
more than three months prior to that date. Under US GAAP, where the accumulated benefit obligation (being the actuarial present
value of benefits attributed by the pension to employee service rendered, based on current and past compensation levels) exceeds
the fair value of plan assets, a liability must be recognised in the statement of financial position. Under Irish and UK GAAP, such
deficiencies are usually recognised over the remaining average service lives of the employees by way of increased contribution rates
except where a major event or transaction has occurred which has not been allowed for in the actuarial assumptions, giving rise to
a material deficit necessitating significant additional contributions to the scheme. In such circumstances, a material deficit so
arising may be recognised over a shorter period
Under Irish and UK GAAP, pension credits are not recognised in the financial statements unless a refund of, or reduction in,
contributions is likely. Under US GAAP, a negative pension cost may arise where a significant unrecognised net asset or gain exists
at the time of implementation. This is required to be amortised on a straight line basis over the average remaining service period
of employees. Note 26 to the financial statements gives the group pension disclosures in accordance with Irish and UK GAAP.
For the purposes of disclosure requirements under US GAAP, the pension cost of the group’s retirement plan has been restated in
the following tables, which are presented in accordance with the requirements of SFAS No. 132(R).
2004 2003
000 000
Projected benefit obligation at beginning of year 14,267 10,819
Service cost 771 797
Interest cost 747 655
Employee contributions 545 558
Actuarial loss 628 1,576
Benefits paid (3) (138)
Projected benefit obligation at end of year 16,955 14,267
Change in plan assets
Fair value of scheme assets at beginning of year 8,166 9,927
Actual return on assets 2,679 (2,853)
Employer contributions paid 646 672
Employee contributions paid 545 558
Benefits paid (3) (138)
Fair value of scheme assets at end of year 12,033 8,166
(Continued)
Summary of differences between Irish, United Kingdom and
United States generally accepted accounting principles
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