Ryanair 2011 Annual Report Download - page 135

133
Notes forming part of the Consolidated Financial Statements
1 Basis of preparation and significant accounting policies
The accounting policies applied in the preparation of the consolidated financial statements for the 2011
fiscal year are set out below. These have been applied consistently for all periods presented, except as otherwise
stated.
Business activity
Ryanair Limited and its subsidiaries (“Ryanair Limited”) has operated as an international airline since
commencing operations in 1985. On August 23, 1996, Ryanair Holdings Limited, a newly formed holding
company, acquired the entire issued share capital of Ryanair Limited. On May 16, 1997, Ryanair Holdings
Limited re-registered as a public limited company, Ryanair Holdings plc (the “Company”). Ryanair Holdings
plc and its subsidiaries are hereafter together referred to as “Ryanair Holdings plc” (or “we”, “our”, “us”,
“Ryanair” or the “Company”) and currently operate a low-fares airline headquartered in Dublin, Ireland. All
trading activity continues to be undertaken by the group of companies headed by Ryanair Limited.
Statement of compliance
In accordance with the International Accounting Standards (“IAS”) Regulation (EC 1606 (2002))
which applies throughout the European Union (“EU”), the consolidated financial statements have been prepared
in accordance with International Accounting Standards and International Financial Reporting Standards
(collectively “IFRS”) as adopted by the EU, which are effective for the year ended and as at March 31, 2011. In
addition to complying with its legal obligation to comply with IFRS as adopted by the EU, the consolidated
financial statements have been prepared in accordance with IFRS as issued by the International Accounting
Standards Board (“IASB”). The consolidated financial statements have also been prepared in accordance with
the Companies Acts, 1963 to 2009.
Details of legislative changes and new accounting standards or amendments to accounting standards,
which are not yet effective and have not been early adopted in these consolidated financial statements, and the
likely impact on future financial statements are set forth below in the prospective accounting changes section.
New accounting standards adopted during the year
From April 1, 2010 the Company has applied IFRS 3 Business Combinations (2008) in accounting for
business combinations. The change in accounting policy has been applied prospectively and has had no impact
in the current year as no acquisitions have taken place. In addition, there were no other new standards,
interpretations or amendments to existing standards adopted for the first time during the year ended March 31,
2011, which had a material impact on our financial position or results from operations.
Basis of preparation
These consolidated financial statements are presented in euro millions, the euro being the functional
currency of the parent entity and the majority of the group companies. They are prepared on the historical cost
basis, except for derivative financial instruments and available-for-sale securities which are stated at fair value,
and share-based payments, which are based on fair value determined as at the grant date of the relevant share
options. Any non-current assets classified as held for sale are stated at the lower of cost and fair value less costs
to sell.
Critical accounting policies
The preparation of financial statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and
liabilities, income and expenses. These estimates and associated assumptions are based on historical experience
and various other factors believed to be reasonable under the circumstances, and the results of such estimates
form the basis of judgements about carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results could differ materially from these estimates. These underlying assumptions are