Ryanair 2006 Annual Report Download - page 33

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Continued
Statement of Accounting Policies 33
ANNUAL REPORT & FINANCIAL STATEMENTS 2006
Property, Plant & Equipment
AIRCRAFT TYPE NO OF OWNED AIRCRAFT USEFUL LIFE RESIDUAL VALUE AVERAGE AGE
Boeing 737-800 86 23 years from date of manufacture 15% of original cost 2.4 yrs
RATES OF DEPRECIATION
Plant and equipment 20 - 33.3%
Fixtures and fittings 20%
Motor vehicles 33.3%
Buildings 5%
Property, plant and equipment are stated at historical cost
less accumulated depreciation and provisions for
impairments, if any. Depreciation is calculated so as to write
off the cost, less estimated residual value of assets, on a
straight line basis over their expected useful lives at the
annual rates in the table above.
Aircraft are depreciated over their estimated useful lives to
estimated residual values as detailed in the table above.
An element of the cost of an acquired aircraft is attributed
on acquisition to its service potential reflecting the
maintenance condition of its engines and airframe. This cost,
which can equate to a substantial element of the total
aircraft cost, is amortised over the shorter of the period to
the next check (usually between 8 and 12 years for Boeing
737-800 “next generation” aircraft ) or the remaining life of
the aircraft.
The costs of subsequent major airframe and engine
maintenance checks are capitalised and amortised over the
shorter of the period to the next check or the remaining life
of the aircraft.
Advance and option payments made in respect of aircraft
purchase commitments and options are recorded at cost and
separately disclosed as part of property, plant and
equipment.
On acquisition of the related aircraft these payments are
included as part of the cost of aircraft and are depreciated
from that date.
Rotable spare parts held by the group are classified as
property, plant and equipment if they are expected to be
used over more than one period and are accounted for in the
same manner as the related aircraft.
Cash and Cash Equivalents
Cash represents cash held at bank and available on demand.
Cash equivalents are current asset investments (other than
cash) that are readily convertible into known amounts of
cash. Cash equivalents include investments in commercial
paper, certificates of deposit and cash deposits of more than
one day, but less than three months. Deposits with a
maturity of greater than three months are recognised as
short term investments.
Financial Assets*
Financial assets comprise cash deposits of greater than
three months maturity. All are classified as held to maturity
as there is a significant financial disincentive from
redeeming such amounts at an earlier stage. All such
amounts are carried initially at fair value and then
subsequently at amortised cost in the balance sheet.
The parent company also holds investments in group
companies which are carried at cost less any impairments.