Ardagh Glass Finance plc - Irish Stock Exchange

ACCOUNTING POLICIES (Continued)
The proceeds received net of any directly attributable transaction costs are credited to share
capital (nominal value) and share premium when vested options are converted into ordinary shares. All
options were vested in the prior year. The Group has no cash-settled share-based payment transaction
as defined in IFRS2.
PROVISIONS
A provision is recognised in the balance sheet when the Group has a present legal or constructive
obligation as a result of a past event, it is probable that an outflow of economic benefits will be
required to settle the obligation and the amount can be reliably estimated. If the effect is material,
provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate, the risks specific to the
liability.
EMISSION RIGHTS AND OBLIGATIONS
Certain jurisdictions in which the Group operates regulate the emissions of carbon dioxide and
other pollutants through the operation of a ‘‘cap and trade’’ type scheme, whereby a participating entity
must deliver emission certificates to a third party (e.g. a regulator) to be able to emit pollutants legally.
The government grants a certain number of emission certificates to an entity for use during a
compliance period. Emission rights granted by governments and other similar bodies under cap and
trade and other similar schemes are recognised at their nominal amount. Where additional allowances
are purchased from third parties, the Group measures such credits at cost on initial recognition with no
subsequent revaluation.
Liabilities arising in relation to emission obligations under such schemes are recognised only in
circumstances where emission rights granted have been exceeded and the differential between actual
and permitted emissions will have to be remedied through the purchase of the required additional
rights at fair value. Liabilities arising from such shortfalls are measured at the current market value of
the certificates necessary to meet the obligations and classified as provisions.
Where excess certificates are sold to third parties, the Group recognises the fair value of the
consideration received as other income in profit or loss offset by the carrying value of the units
derecognised. The Group has a policy of only selling certificates where the level of projected emissions
over the relevant compliance period has been reliably estimated and the allowances available to offset
such emissions is greater than those projected emissions.
SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares are shown in equity as a deduction from the proceeds, net of tax.
REVENUE RECOGNITION
(i) Goods sold and services rendered
Revenue from the sale of goods is recognised in the income statement when the significant risks
and rewards of ownership have been transferred to the buyer. Revenue from services rendered is
recognised in the income statement in proportion to the stage of completion of the transaction at the
balance sheet date. It is the Group’s policy to sell its products to the end customer with a right of
return. Accumulated experience is used to estimate and provide for such returns at the time of sale.
Revenue is included net of cash, value added tax and other discounts.
Pallet deposits are not recognised in revenue.
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