Westjet 2000 Annual Report Download - page 27

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Years ended December 31, 2000 and 1999
(Tabular Amounts are Stated in Thousands of Dollars)
1. Significant accounting policies:
(a) Principles of consolidation:
These consolidated financial statements include the accounts of the Corporation and its
wholly-owned subsidiaries.
(b) Revenue recognition:
Passenger revenue is recognized when air transportation is provided. The value of unused
tickets is included in the balance sheet as advance ticket sales under current liabilities.
(c) Non-refundable passenger credits:
The Corporation, under certain circumstances, may issue future travel credits which are non-
refundable and which expire one year from the date of issue. The utilization of passenger
credits are recorded as revenue when the passenger has flown.
(d) Foreign currency:
Monetary assets and liabilities, denominated in foreign currencies, are translated into
Canadian dollars at rates of exchange in effect at the balance sheet date. Other assets and
revenue and expense items are translated at rates prevailing when they were acquired or
incurred.
Exchange gains and losses arising on the translation of long-term monetary items that are
denominated in foreign currencies are deferred and amortized on a straight-line basis over the
remaining term of the related monetary item.
(e) Inventory:
Materials and supplies are valued at the lower of cost and replacement value. Aircraft
expendables and consumables are expensed as incurred.
(f) Deferred costs:
Sales and marketing and reservation expenses attributed to the advance ticket sales are
deferred and expensed in the period the related revenue is recognized. Included in prepaid
expenses are $2,435,000 (1999 - $1,169,000) of deferred costs.
(g) Capital assets:
Capital assets are depreciated over their estimated useful lives at the following rates and
methods.
Asset Basis Rate
Aircraft net of estimated residual value Flight hours Hours flown
Spare engines and parts Flight hours Hours flown
Aircraft under capital lease Straight-line Over the term of the lease
Flight simulators Straight-line 10 and 25 years
Computer hardware and software Straight-line 5 years
Equipment Straight-line 5 years
Leasehold improvements Straight-line Over the term of the lease
Buildings Straight-line 40 years
Darrin works with
our maintenance team
in Hamilton.
WESTJET AIRLINES LTD.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Victoria