Ryanair 2011 Annual Report Download - page 137

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While Ryanair may, in very limited circumstances, sub-lease its aircraft, it remains fully liable to perform all of
its contractual obligations under the ‘head lease’ notwithstanding any such sub-leasing.
Both of these elements of accounting policies involve the use of estimates in determining the quantum
of both the initial maintenance asset and/or the amount of provisions to be recorded and the respective periods
over which such amounts are charged to income. In making such estimates, Ryanair has primarily relied on its
own and industry experience, industry regulations and recommendations from Boeing; however, these estimates
can be subject to revision, depending on a number of factors, such as the timing of the planned maintenance, the
ultimate utilisation of the aircraft, changes to government regulations and increases or decreases in estimated
costs. Ryanair evaluates its estimates and assumptions in each reporting period and, when warranted, adjusts its
assumptions, which generally impact maintenance and depreciation expense in the income statement on a
prospective basis.
Basis of consolidation
The consolidated financial statements comprise the financial statements of Ryanair Holdings plc and its
subsidiary undertakings as of March 31, 2011. 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
Business combinations are accounted for using the acquisition method as at the acquisition date, which
is the date on which control is transferred to the Company. Control is the power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities.
Acquisitions on or after January 1, 2010
For acquisitions on or after January 1, 2010, the Company measures goodwill at the acquisition date as
the fair value of the consideration transferred, plus the recognised amount of any non-controlling interests in the
acquire, less the net recognised amount of the identifiable assets acquired and liabilities assumed.
Acquisitions between January 1, 2004 and January 1, 2010
For acquisitions between January 1, 2004 and January 1, 2010, goodwill represents the excess of the
cost of the acquisition over the Company’s interest in the recognised amount of the identifiable assets, liabilities
and contingent liabilities of the acquiree.
Acquisitions prior to January 1, 2004 (date of transition to IFRSs)
As part of its transition to the IFRSs, the Company elected to restate only those business combinations
that occurred on or after January 1, 2003. Prior to January 1, 2003, goodwill represented the amount recognised
under the Company’s previous accounting framework, Irish GAAP.
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.