10773 AirlingPDF - Aer Lingus

AER LINGUS GROUP PLCSTATEMENT OF ACCOUNTING POLICIESThe Group's principal accounting policies are set out below. All of these policies have been applied consistently throughout theyear and the preceding year except where indicated.APrinciples of PreparationThe consolidated accounts have been drawn up under the historical cost convention in accordance with accounting standardsgenerally accepted in Ireland and Irish statute, comprising the Companies Acts, 1963 to 1999 and the EuropeanCommunities (Companies: Group Accounts) Regulations, 1992. Accounting standards generally accepted in Ireland inpreparing accounts giving a true and fair view are those published by the Institute of Chartered Accountants in Ireland andissued by the Accounting Standards Board.BBasis of ConsolidationThe consolidated accounts include the accounts of the Company and all its subsidiaries made up to 31 December. The resultsof subsidiaries disposed of during the year are included in the consolidated accounts up to the effective date of disposal.CIncome RecognitionTurnover comprises revenues (excluding VAT and similar taxes, trade discounts and transactions between companies in theGroup) from passenger and cargo operations arising in the normal course of business.Revenues from passenger and cargo operations are recognised when transportation is provided. The value of sales made, forwhich transportation has not been provided at year-end, is included in creditors falling due within one year under the caption"Passenger and Cargo sales in advance". Expired coupons are recognised as revenue on a systematic basis.DPension and Other Post-Retirement ObligationsThe Group provides pensions to substantially all employees through contributions to a variety of separately administeredschemes, the majority of which are defined benefit pension schemes.The amount charged to the profit and loss account in respect of such schemes and other post-retirement obligations is theestimated regular cost of providing the benefits accrued in the year (as advised by professionally qualified actuaries), adjustedto reflect variations from that cost. The regular cost is calculated so that it represents a substantially level percentage ofcurrent and future pensionable payroll. Variations from regular cost are charged or credited to the profit and loss accountover the estimated average remaining service lives of employees.ETaxationIrish and overseas corporation tax payable is provided on taxable profits at current rates.Deferred taxation is provided, using the liability method, on material timing differences at the average tax rates expected toapply when such timing differences are expected to reverse. The deferred tax provision is discounted to reflect the time valueof money. This represents a change in accounting policy in 2000 arising from the adoption of the provisions of FRS 19(Deferred tax), as previously provision was only made for deferred tax to the extent that it was expected to become payablein the foreseeable future.23