Ryanair 2008 Annual Report Download - page 48

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For the year ended March 31, 2008, the Group revised its estimates of the maintenance component costs
to reflect recent major maintenance experience. IFRS requires that changes in estimates of this nature are
accounted for prospectively only, and historical maintenance and depreciation estimates are not required to
be adjusted. This change in estimate resulted in a 16.0m lower combined maintenance and depreciation
charge for the current year, than what the charge would have otherwise been using the historical estimation
method.
Basis of consolidation
The consolidated financial statements comprise the financial statements of Ryanair Holdings plc and its
subsidiary undertakings as of March 31, 2008. Subsidiaries are entities controlled by us. Control exists
when we have the power either directly or indirectly to govern the financial and operating policies of the
entity so as to obtain benefit from its activities.
All intercompany account balances and any unrealised income or expenses arising from intra-group
transactions have been eliminated in preparing the consolidated financial statements.
The results of subsidiary undertakings acquired or disposed of in the period are included in the
consolidated income statement from the date of acquisition or up to the date of disposal. Upon the
acquisition of a business, fair values are attributed to the separable net assets acquired.
Business combinations
The purchase method of accounting is employed in accounting for the acquisition of businesses. In
accordance with IFRS 3, the cost of a business combination is measured as the aggregate of the fair values at
the date of exchange of assets given and liabilities incurred or assumed in exchange for control, together with
any directly attributable expenses. The assets and liabilities and contingent liabilities of the acquired entity
are measured at their fair values at the date of acquisition. When the initial accounting for a business
combination is determined provisionally, any adjustments to the provisional values allocated are made within
12 months of the acquisition date and are effected prospectively from that date.
Foreign currency translation
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (the “functional currency”). The
consolidated financial statements are presented in euro, which is the functional currency of the majority of
the Group’s entities.
Transactions arising in foreign currencies are translated into the respective functional currencies of the
Group at the rates of exchange ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of exchange prevailing at the balance sheet date.
Non-monetary assets and liabilities denominated in foreign currencies are translated to euro at foreign
exchange rates ruling at the dates the transactions were effected. Foreign currency differences arising on
retranslation are recognised in profit and loss, except for differences arising on qualifying cash flow hedges,
which are recognised directly in equity.