Ryanair 2008 Annual Report Download - page 49

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Property, plant & equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and provisions
for impairments, if any. Cost includes expenditure that is directly attributable to the acquisition of the asset.
Cost may also include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign
currency purchases of property, plant and equipment. Depreciation is calculated so as to write off the cost,
less estimated residual value, of assets on a straight line basis over their expected useful lives at the
following annual rates:
Rate of
Depreciation
Plant and equipment................................................................................................................ 20-33.3%
Fixtures and fittings ................................................................................................................ 20%
Motor vehicles ........................................................................................................................ 33.3%
Buildings................................................................................................................................. 5%
Aircraft are depreciated on a straight line basis over their estimated useful lives to estimated residual
values. The estimates of useful lives and residual values at year end are:
Aircraft Type
Number of Aircraft
at March 31, 2008 Useful Life Residual Value
Boeing 737-800s 128 23 years from date of manufacture 15% of market value,
determined periodically
For the year ended March 31, 2008, the Group revised its estimates of the recoverable amount of aircraft
residual values, from 15% of original cost to 15% of market value, determined periodically based on actual
aircraft disposals during the year, agreements to sell further aircraft in future periods and current market
valuations. This change in estimate resulted in a reduction of 13.6m in the depreciation charge during the
year, as compared to the previous estimate.
An element of the cost of an acquired aircraft is attributed on acquisition to its service potential
reflecting the maintenance condition of its engines and airframe. This cost, which can equate to a substantial
element of the total aircraft cost, is amortised over the shorter of the period to the next check (usually
between 8 and 12 years for Boeing 737-800 aircraft) or the remaining life of the aircraft. The costs of
subsequent major airframe and engine maintenance checks are capitalised and amortised over the shorter of
the period to the next check or the remaining life of the aircraft.
For the year ended March 31, 2008, the Group revised its estimates of the maintenance component costs
to reflect its 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.
Advance and option payments made in respect of aircraft purchase commitments and options to acquire
aircraft are recorded at cost and separately disclosed within property, plant and equipment. On acquisition of
the related aircraft, these payments are included as part of the cost of aircraft and are depreciated from that
date.
Rotable spare parts held by the Group are classified as property, plant and equipment if they are
expected to be used over more than one period and are accounted for and depreciated in the same manner as
the related aircraft.