Ryanair 2006 Annual Report Download - page 29

Statement of Compliance (continued)
• Amendments to IAS 39 and IFRS 4: Financial Guarantee
Contracts (effective for fiscal periods beginning on or after
January 1, 2006): this amendment requires financial
guarantee contracts to be accounted for as financial
instruments under IAS 39 unless they have been explicitly
dealt with as insurance contracts in the past in which case
the previous accounting may continue. When the company
enters into financial guarantee contracts to guarantee the
indebtedness of other companies within the group, we
consider these to be insurance arrangements and account
for them as such. We treat the guarantee contract as a
contingent liability until such time as it becomes probable
that we will be required to make a payment under the
guarantee. We do not enter into financial guarantee
contracts with third parties. We do not expect the
amendments to have any impact on the financial statements
for the period commencing April 1, 2006
• Amendments to IAS 39 “The Fair Value Option” (effective for
fiscal periods beginning on or after January 1, 2006): this
amendment is not expected to affect us significantly.
•IFRS 7 - Financial Instruments: Disclosures (effective
January 1, 2007). This will require us to make further
disclosures relating to our financial instruments than are
currently required under IAS 32.
• IFRIC 4 - Determining whether an arrangement contains a
Lease (effective for fiscal periods beginning on or after
January 1, 2006). This amendment is not expected to affect
us significantly.
Basis of Consolidation
The Consolidated Financial Statements comprise the
financial statements of Ryanair Holdings plc and its
subsidiary undertakings for the year ended March 31, 2006.
Subsidiaries are entities controlled by us. Control exists
when we have the power either directly or indirectly to
govern the financial and operating policies of the entity so as
to obtain benefit from its activities.
All intercompany account balances have been eliminated in
preparing the Consolidated Financial Statements.
The results of subsidiary undertakings acquired or disposed
of in the period are included in the consolidated income
statement from the date of acquisition or up to the date of
disposal. Upon the acquisition of a business, fair values are
attributed to the separable net assets acquired. In the
company’s financial statements, investments in subsidiary
undertakings are stated at cost less any amounts written off.
2005 Comparative Information
Using the exemptions within IFRS 1, IAS 32 and 39 only came
into effect from April 1, 2005. Where the implementation of
these standards resulted in a change in accounting policy
from April 1, 2005, the 2005 comparatives do not reflect the
requirements of these standards. The policies applied in
respect of such 2005 comparative information has been set
out at the end of this section (under the heading “2005
Accounting Policies” on page 34). The related 2006
accounting policy has been annotated with an asterisk in the
heading to indicate the change in policy. Where there is no
asterisk, the 2005 policy has been applied consistently to
both periods.
Intangible Assets-Landing Rights
Intangible assets acquired are recognised to the extent it is
considered probable that expected future benefits will flow
to the group and the associated costs can be measured
reliably. Landing rights acquired as part of a business
combination are capitalised at fair value at that date and are
not amortised, where those rights are considered to be
indefinite. The carrying value of these rights are reviewed
for impairment at each reporting date and are subject to
impairment testing when events or changes in circumstances
indicate that carrying values may not be recoverable. No
impairment to the carrying values of the group's intangible
assets has been recorded to date.
Revenues
Scheduled revenues comprise the invoiced value of airline
and other services, net of government taxes. Revenue from
the sale of flight seats is recognised in the period in which
the service is provided. Unearned revenue represents flight
seats sold but not yet flown and is included in accrued
expenses and other liabilities. It is released to the Income
Statement as passengers fly. Unused tickets are recognised
as revenue on a systematic basis. Miscellaneous fees
charged for any changes to flight tickets are recognised as
revenue immediately.
Ancilliary revenues are recognised in the Income Statement
in the period the ancillary services are provided.
(Continued)
Statement of Accounting Policies 29
ANNUAL REPORT & FINANCIAL STATEMENTS 2006