Aer Lingus 2013 Annual Report Download - page 89

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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 27 March 2014. The financial statements are for the Group
for the financial years ended 31 December 2013 and 31 December 2012. The principal companies within the Group during the years ended
31 December 2013 and 31 December 2012 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), IFRS
Interpretations Committee (IFRS IC) interpretations and the Companies Acts 1963 to 2013 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. The going concern statement on page 58 forms part of the consolidated Financial Statements. The notes to the
consolidated financial statements include the information in the Report of the Remuneration Committee on Directors’ Remuneration that is
described as forming part of the financial statements.
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 available knowledge of the
amount, event or actions, actual results may ultimately 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.
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 accounting policies adopted in the preparation of the consolidated financial statements are consistent with those followed in the Group’s
preparation of the annual consolidated financial statements for the year ended 31 December 2012, with the exception of the items noted
below.
(i) Lessor accounting
Following the launch of the Group’s contract flying services during the year, the Group acts as an operating lessor of aircraft, including crew
and other services. Amounts in respect of these leases are billed in advance and recorded as deferred revenue. Revenue and costs are
recognised as the services are provided, with the costs associated with this revenue recognised within the relevant income statement
categories (staff costs, maintenance, depreciation, aircraft hire and overheads). Revenue is recorded within other revenues.
(ii) Change in accounting policy – adoption of IAS 19, Employee Benefits (revised)
IAS 19, Employee Benefits (revised) (“IAS 19R”) has been adopted retrospectively in these financial statements, including restatements to
comparative information.
The main impact of the adoption of IAS 19R on the financial results of the Group is in the calculation of finance income and charges in
respect of post employment benefit obligations. The previous practice of recognising the expected return on plan assets (presented within
finance income) and separately the interest expense on the post employment benefit obligation (presented within finance expense) is now
replaced by the calculation of a single interest amount on the net post employment benefit liability (or asset) using the discount rate adopted
at the beginning of the period.
IAS 19R introduces a new term “remeasurements”, which describes the total of actuarial gains and losses, and the difference between actual
investment returns and the returns implied by the net interest cost.
There is no change in the method of determining the interest rate, which continues to reflect the yield of high quality corporate bonds of
comparable maturity to the liabilities of the Group’s post employment benefit obligations. The adoption of IAS 19R has increased the loss
before taxation as the discount rate applied to plan assets in calculating finance income under IAS 19R is lower than the rate previously used
to calculate expected return on plan assets.
The restatement has no effect on total comprehensive income, as the restated finance charge in the income statement is offset by a
corresponding adjustment to remeasurements of post employment benefit arrangements in other comprehensive income. The restatement
had no impact on the consolidated statement of financial position or on basic or diluted earnings per share. The effects of these changes on
each of the impacted financial statement captions recognised in the 2012 financial statements are set out in the table below. The impact on
periods prior to 2012 has not been disclosed as the directors deem it to be impractical.