Ardagh Glass Finance plc - Irish Stock Exchange

ACCOUNTING POLICIES (Continued)
to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
FINANCIAL INSTRUMENTS
(i) Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other receivables, cash and cash
equivalents, restricted cash, borrowings and trade and other payables. Non-derivative financial
instruments are recognised initially at fair value plus any directly attributable transaction costs, except
as described below. Subsequent to initial recognition, non-derivative financial instruments are measured
as described below.
A financial instrument is recognised when the Group becomes a party to the contractual provisions
of the instrument. Financial assets are derecognised when the Group’s contractual rights to the cash
flows from the financial assets expire, are extinguished, or if the Group transfers the financial asset to
another party and transfers all the risks and rewards of ownership of the asset, or does not retain
control and transfers substantially all the risks and rewards of ownership of the asset. Regular way
purchases and sales of financial assets are accounted for at trade date i.e. the date that the Group
commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s
obligations specified in the contracts expire, are discharged or cancelled.
(ii) Trade and other receivables
Trade and other receivables are recognised initially at fair value and are thereafter measured at
amortised cost using the effective interest method less any provision for impairment. A provision for
impairment of trade receivables is recognised when there is objective evidence that the Group will not
be able to collect all amounts due according to the original terms of the receivables. Significant
financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation, and default or delinquency in payments (more than 90 days overdue) are considered
indicators that the trade receivable is impaired. The amount of the provision is the difference between
the asset’s carrying amount and the present value of estimated future cash flows, discounted at the
original effective interest rate. The carrying amount of the asset is reduced through the use of an
allowance account, and the amount of the loss is recognised in the Income Statement within
administrative expenses. When a trade receivable is uncollectible, it is written off against the allowance
account for trade receivables. Subsequent recoveries of amounts previously written off are credited
against administrative expenses in the Income Statement.
(iii) Securitised assets
The Group has entered into a series of securitisation transactions involving certain of its trade
receivables. The securitised assets continue to be recognised on the Group balance sheet until all of the
rights to the cash-flows from those assets have expired or have been fully transferred outside the
Group, or until substantially all of the related risks, rewards and control of the related assets have been
transferred to a third party.
(iv) Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and bank
overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
Cash and cash equivalents are carried at amortised cost.
F-14