Aer Lingus 2011 Annual Report Download - page 65

Annual Report 2011 63
FINANCIAL STATEMENTS Aer Lingus Group Plc
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 General information
Aer Lingus Group plc (“the Company”) and its subsidiaries (together “the Group”) operates as an Irish airline primarily providing passenger
and cargo transportation services from Ireland to the UK and Europe (“short haul”) and also to the US (“long haul”). The Company is a
public limited liability company incorporated and domiciled in Ireland. The address of its registered office is Dublin Airport, Co. Dublin,
Ireland. The Company has its primary listing on the Irish Stock Exchange and a standard listing on the London Stock Exchange.
These financial statements were authorised for issue by the Board of directors on 29 March 2012. The financial statements are for the
Group for the financial years ended 31 December 2011 and 31 December 2010. The principal companies within the Group during the
years ended 31 December 2011 and 31 December 2010 are disclosed in Note 17.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
2.1 Basis of preparation
The consolidated financial statements of Aer Lingus Group plc, which are presented in euro and rounded to the nearest thousand (¤’000)
have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS),
International Financial Reporting Interpretations Committee (IFRIC) interpretations and the Companies Acts 1963 to 2009 applicable to
companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention, as
modified by the revaluation of derivative financial instruments.
IFRS as adopted by the EU differ in certain respects from IFRS as issued by the IASB. References to IFRS hereafter should be construed as
references to IFRS as adopted by the EU.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amount,
event or actions, actual results ultimately may differ from those estimated. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.
2.1.1 Changes in accounting policy, reclassifications and related disclosures
The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those followed in the
preparation of the annual consolidated financial statements for the year ended 31 December 2010, except as set out in the note
“Voluntary change in accounting policy” shown below.
Voluntary change in accounting policy
During the final quarter of 2011, the Group voluntarily adopted a change in its accounting policy with respect to the reporting of actuarial
gains and losses arising on its defined benefit, post employment plans. Previously the Group had availed of the option permitted by IAS
19 "Employee Benefits" ("IAS 19") to recognise actuarial gains and losses immediately within the income statement. The Group has now
availed of an alternative treatment permitted by IAS 19 whereby actuarial gains and losses are recognised immediately within other
comprehensive income. The reasons why the Group considers that the new policy provides reliable and more relevant information are:
that it avoids recognising within the income statement, short-term fluctuations in an item that is long-term in nature and; that, as most
listed companies in the UK & Ireland adopt this policy, it is the policy most understood by UK and Irish users of financial statements. This
policy has now been mandated by IAS 19 Revised which will be effective (assuming EU endorsement) for years commencing on or after 1
January 2013. Following the change, service costs are recognised within staff costs in the income statement. The expected return on
scheme assets and interest costs are recorded within finance income and finance expense, respectively and actuarial gains and losses are
recognised immediately in other comprehensive income. This change in accounting policy has been applied retrospectively in
accordance with IAS 8 "Accounting policies, changes in accounting estimates and errors". The effect of this voluntary change in
accounting policy on the impacted financial statement lines including earnings per share for the years ended 31 December 2011 and
2010 is shown below. Within the following tables, the adjustment to staff costs represents the reclassification of actuarial movements to
other comprehensive income and, interest costs and expected returns on scheme assets to finance expense and income respectively.