Ryanair 2004 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2004 Ryanair annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 74

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74

(viii) Business combinations
In accordance with acquisition accounting rules, Irish and US GAAP require the fair value of purchase consideration to be
allocated to the net assets acquired based on their fair values at the acquisition dat e.
On April 10, 2003 Ryanair acquired assets comprising operating leases and certain landing and takeoff slots at Stansted Airport
from KLM UK Limitedfor 20.795m. The difference between the purchase consideration and the fair value of the net liabilities
amounting to of 46.841m has been treated as goodwill under Irish and UK GAAP as there is no regular market for landing and
takeoff slots at Stansted airport and their fair value cannot be reliablymeasured. Goodwill is amortised to the profit and loss
account over its estimated useful life which is 20 years in this case.
The definition of intangible assets set out in SFAS No. 141 “Business Combinations” includes assets arising from contractual or
legal rights regardless of whether these rights are transferable or separable. For US GAAP purposes Ryanair has determined
that the fair value of the acquired landing rights and takeoff slots at Stansted Airport is 46.841m based on the net present
value of the estimated cashflows generated from these access rights. This intangible asset is not amortised as Ryanair has a
right to use the landing and takeoff slots in perpe tuity and the intangible asset has an indefinite life. Ryanair will test this
intangible asset for impairment annually or more frequently if events or changes in circumstances indicate that the asset
might be impaired. There was no impairment to these rights in the current year.
(Continued)
Summary of differences between Irish, United Kingdom and
United States generally accepted accounting principles
68
A N N U A L R E P O RT & F I N A N C I A L S T A T E M E N T S 2 0 0 4