Ryanair 2010 Annual Report Download - page 144

142
Basis of consolidation
The consolidated financial statements comprise the financial statements of Ryanair Holdings plc and its
subsidiary undertakings as of March 31, 2010. Subsidiaries are entities controlled by Ryanair. Control exists
when Ryanair has the power either directly or indirectly to govern the financial and operating policies of an
entity so as to obtain benefit from its activities.
All inter-company account balances and any unrealised income or expenses arising from intra-group
transactions 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.
Business combinations
The purchase method of accounting is employed in accounting for the acquisition of businesses. In
accordance with IFRS 3, the cost of a business combination is measured as the aggregate of the fair values at the
date of exchange of assets given and liabilities incurred or assumed in exchange for control, together with any
directly attributable expenses. The assets and liabilities and contingent liabilities of the acquired entity are
measured at their fair values at the date of acquisition. When the initial accounting for a business combination is
determined provisionally, any adjustments to the provisional values allocated are made within 12 months of the
acquisition date and are effected prospectively from that date.
Foreign currency translation
Items included in the financial statements of each of the group entities are measured using the currency
of the primary economic environment in which the entity operates (the “functional currency”). The consolidated
financial statements are presented in euro, which is the functional currency of the majority of the group entities.
Transactions arising in foreign currencies are translated into the respective functional currencies at the
rates of exchange in effect at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies are re-translated at the rate of exchange prevailing at the balance sheet date. Non-monetary assets and
liabilities denominated in foreign currencies are translated to euro at foreign exchange rates in effect at the dates
the transactions were effected. Foreign currency differences arising on retranslation are recognised in profit and
loss, except for differences arising on qualifying cash-flow hedges, which are recognised in other
comprehensive income.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and provisions
for impairments, if any. Cost includes expenditure that is directly attributable to the acquisition of the asset. Cost
may also include transfers from equity of any gain or loss on qualifying cash-flow hedges of foreign currency
purchases of property, plant and equipment. 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 following annual rates:
Rate of
Depreciation
Plant and equipment ...................................................................................................................... 20-33.3%
Fixtures and fittings ....................................................................................................................... 20%
Motor vehicles ............................................................................................................................... 33.3%
Buildings........................................................................................................................................ 5%