Ryanair 2008 Annual Report Download - page 58

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58
The net book value of assets held under finance leases at March 31, 2008 and 2007 was 1316.0m and
1183.1m respectively.
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.
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.
There were six Boeing 737-800 aircraft disposed of during the year, together with an agreement to
dispose of aircraft at future dates in 2009 and 2010. The sale proceeds of the six aircraft sold and deposits
received in respect of future aircraft disposals, in aggregate amounted to 1150.0m.
During the year ended March 31, 2008 accelerated depreciation of 110.6m arose in relation to the
agreement to dispose of 14 aircraft at future dates in 2009 and 2010.
3 Intangible assets
At March 31,
2008 2007
1000 1000
Landing rights ...........................................................................................................
46,841 46,841
Landing slots were acquired with the acquisition of Buzz Stansted Limited in April 2003. As these
landing slots have no expiry date and are expected to be used in perpetuity, they are considered to be of
indefinite life and accordingly are not amortised. The directors also consider that there has been no
impairment of the value of these rights to date. The recoverable amount of these rights has been determined
on a value in use basis, using discounted cash flow projections for a 20 year period for each route which has
an individual landing right. The calculation of value in use is most sensitive to the operating margin and
discount rate assumptions. Operating margins are based on the existing margins generated from these routes
and adjusted for any known trading conditions. The trading environment is subject to both regulatory and
competitive pressures that can have a material affect on the operating performance of the business.
Foreseeable events, however, are unlikely to result in a change of projections of a significant nature so as to
result in the landing rights carrying amounts exceeding their recoverable amounts. These projections have
been discounted using a rate that reflects management’s estimate of the long term pre tax return on capital
employed for its scheduled airline business, estimated to be 5.4% for 2008 and 5.0% for 2007.