Aer Lingus 2012 Annual Report Download - page 73

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FINANCIAL STATEMENTS Aer Lingus Group Plc
ANNUAL REPORT 2012
71
2.4 Foreign currency translation
(a) Functional and presentation currency
The consolidated financial statements are presented in euro, which is the functional and presentation currency of the Company and all of its
trading subsidiaries.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions,
or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income
statement in “Other (gains)/losses - net” except when deferred in equity as qualifying cash flow hedges.
Exchange rates prevailing at the reporting date are set out below:
USD STG
31 December 2012 1.32 0.82
31 December 2011 1.30 0.84
Average exchange rates during the year were as follows:
USD STG
2012 1.29 0.82
2011 1.40 0.87
2.5 Property, plant and equipment
All property, plant and equipment is stated at cost or deemed cost less depreciation. Cost includes expenditure that is directly attributable to
the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the income statement during the financial period in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost to their residual values
over their estimated useful lives as follows:
Useful lives Residual values¹
Flight equipment
Aircraft fleet and major spares ²
- short haul aircraft 18 years 10% of cost
- long haul aircraft 20 years 10% of cost
Rotable spares 5 – 11 years Nil
Modifications to leased aircraft Period of lease Nil
Property
Freehold Principally 50 years Nil
Leasehold Period of lease Nil
Equipment
Ground equipment 3 – 20 years Nil
Other equipment 2 – 10 years Nil
Notes to the consolidated financial statements (continued)