Aer Lingus 2008 Annual Report Download - page 73

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71
AER LINGUS GROUP PLC - ANNUAL REPORT 2008
12 Other financial assets
Following amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7, Financial Instruments:
Disclosures the Group reclassified as loans and receivables, all the financial assets that had been previously classified as
available-for-sale, with effect from 1 July 2008. This reclassification was made as these financial assets meet the definition of
loans and receivables and the Group has the intention and ability to hold these financial assets until maturity.
Available-for-sale financial assets
2008 2007
€’000 €’000
Beginning of year 105,823 118,903
Disposals - (10,633)
Exchange differences (7,141) (11,399)
Interest income 1,464 5,637
Revaluation movement transferred to equity 562 3,315
Reclassification to loans and receivables (100,708) -
End of year - 105,823
Less: non-current portion - (105,823)
Current portion - -
Loans and receivables
2008 2007
€’000 €’000
Beginning of year - -
Reclassification from available-for-sale 100,708 -
Exchange differences 11,445 -
Interest income 2,956 -
End of year 115,109 -
Less: non-current portion (80,983) -
Current portion 34,126 -
There were no impairment provisions on loans and receivables in 2008.
Loans and receivables assets comprise the following:
2008 2007
€’000 €’000
Unlisted securities:
- Debt securities trade on inactive markets with fixed interest rates ranging from
4.4% to 7.4% and maturity dates from November 2009 to September 2015 115,109 105,823
Financial assets with a fair value of €100.7m were reclassified during 2008, with the fair value at that date becoming the assets’
new carrying value for amortised cost.
These assets are all denominated in US Dollars. These unlisted securities are mainly held in order to meet certain finance lease
obligations denominated in the same currency and with the same maturity. These securities, together with the interest receivable
thereon, will be sufficient to meet the associated lease obligations.
The maximum exposure to credit risk at the reporting date is the carrying amount of the debt securities classified as loans and
receivables. None of the debt securities are either past due or expired.
As at 31 December 2008 the fair values and the carrying values of the financial assets reclassified during the current year were
€110.4m and €115.1m respectively. If the financial assets had not been reclassified a fair value loss of €6.3m would have been
recognised in equity in the period following the reclassification of the financial assets. The fair values of unlisted securities are
based on cash flows discounted using a rate based on the market interest rate and the risk premium appropriate to the unlisted
securities. Following reclassification €1.6m was amortised from the available-for-sale reserve to the income statement in the period.