EasyJet 2011 Annual Report Download - page 77

Download and view the complete annual report

Please find page 77 of the 2011 EasyJet annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

Share capital and dividend distribution
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary
shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where any Group company
purchases the Company’s equity shares (treasury shares) the consideration paid and any directly attributable
incremental costs are deducted from equity until the shares are cancelled or reissued.
Dividend distributions to the Company’s shareholders are recognised as a liability in the period in which the
dividends are approved by the Company’s shareholders.
Share-based payments
easyJet has a number of equity-settled share incentive schemes. The fair value of share options is measured at
the date of grant using the Binomial Lattice option pricing model. The fair value of awards under the Long Term
Incentive Plan and Share Incentive Plan is the share price at the date of grant.
The fair value of the estimated number of options and awards that are expected to vest is expensed to the
income statement on a straight-line basis over the period that employees’ services are rendered, with a
corresponding increase in shareholders’ equity. Where performance criteria attached to the share options and
awards are not met, any cumulative expense previously recognised is reversed. The social security obligations
payable in connection with grant of the share options is an integral part of the grant itself and the charge is
treated as a cash-settled transaction.
easyJet settles share awards under the Long Term Incentive, Sharesave and Share Incentive Plans by purchasing
its own shares on the market through employee share trusts. The cost of such purchases is deducted from
retained earnings in the period that the transaction occurs.
Segmental disclosures
easyJet has one operating segment, being its route network, based on management information provided
to the Executive Management Team; which is easyJet’s Chief Operating Decision Maker. Resource allocation
decisions are made for the benefit of the route network as a whole, rather than for individual routes within
the network. Performance of the network is assessed based on the consolidated profit or loss before tax for
the year.
Revenue is allocated to geographic segments on the following bases:
–Revenue earned from passengers is allocated according to the location of the first departure airport on each
booking
–Commission revenue earned from partners is allocated according to the domicile of each partner
Assets held for sale
Where assets are available for sale in their current condition, and their disposal is highly probable, they are
reclassified as held for sale and are measured at the lower of their carrying value less costs to sell. Depreciation
ceases at the point of their reclassification from non-current assets.
Impact of new standards and interpretations
The following standards and interpretations issued by the International Accounting Standards Board have been
implemented for the year ended 30 September 2011:
New and revised standards
IAS 24 Related Party Disclosures
Amendments to standards
IAS 32 Financial Instruments: Presentation (Classification of Rights Issues)
IFRS 1 First-time Adoption of IFRS (Additional Exemptions for First-time Adopters)
IFRS 1 Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters
IFRS 2 Share-based Payment (Group cash-settled share-based payment transactions)
Improvements to IFRS (2009) – items with an effective date of 1 January 2010
New and revised interpretations
IFRIC 14 Prepayments of a Minimum Funding Requirement
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
The adoption of these standards and interpretations has not led to any changes in accounting policies.
easyJet plc
Annual report
and accounts 2011
GovernanceCorporate responsibility
Business review Performance and risk
Overview Accounts & other information
75