Annual Report 2010 in PDF - BBA Aviation

Accounting Policies
Basis of Accounting
The fnancial statements have been prepared using the historical cost
convention adjusted for the revaluation of certain f nancial instruments.
The principal accounting policies adopted are set out below which
have been consistently applied with the prior year except where noted.
The fnancial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) adopted for use
in the European Union and therefore comply with Article 4 of the EU
IAS Regulation. They have also been prepared in accordance with IFRS
as issued by the International Accounting Standards Board.
There are no new Standards issued by the International
Accounting Standards Board that are efective in the current period.
The following amendments to existing Standards are ef ective
for the current period:
IFRS 3 Business Combinations (revised)
IAS 27 Consolidated and Separate Financial Statements (revised)
Amendment to IAS 39 Eligible Hedged Items
Amendment to IFRS 2 Group Cash-settled Share-based Payment
Transactions
The adoption of these Amendments has not had a material impact on
the Group’s fnancial statements, apart from the adoption of IFRS 3
Business Combinations (revised) which has had the following ef ect
on the fnancial statements for the year ended 31 December 2010;
As a result of the acquisition of SAS Ground Services UK Ltd (see
note 24 for details) in the year, £0.5 million of acquisition related
costs have been charged to Other Operating Expenses. Prior to the
adoption of IFRS 3 these would have been included in goodwill.
There are no new interpretations issued by the International
Financial Reporting Interpretations Committee that are ef ective for
the current period and have not been previously applied in the
Group’s f nancial statements.
At the date of authorisation of these f nancial statements,
the following Standards and Interpretations which have not been
applied in these fnancial statements were in issue but not
yet ef ective:
IAS 24 Related Party Disclosures (revised)
IFRS 9 Financial Instruments
Amendment to IAS 32 Financial Instruments: Presentation:
Classifcation of Rights Issues
IFRIC 19 Extinguishing Financial Liabilities with
Equity Instruments
Amendment to IFRIC 14 – IAS 19 Prepayments of a Minimum
Funding Requirement
The adoption of IFRS 9 which the Group plans to adopt for the year
beginning on 1 January 2013 will impact both the measurement and
disclosures of f nancial instruments.
The directors anticipate that the adoption of the remaining
Standards above, in future periods, will not have a material impact on
the fnancial statements of the Group.
Basis of Consolidation
The Group fnancial statements incorporate the f nancial statements
of the parent company and all subsidiary undertakings under the
acquisition method of accounting.
The results of subsidiary undertakings acquired or sold during the year
are included in the consolidated income statement from the ef ective
date of acquisition or up to the efective date of disposal as
appropriate. Control is achieved where the company has the power
to govern the fnancial and operating policies of an investee so as to
obtain benefts from activities.
Goodwill on acquisitions, being the excess of the fair value of the
consideration paid, the non-controlling interest, and the fair value of
any previously held equity interest in the acquiree over the fair value of
the identifable net assets and liabilities acquired, is capitalised and
tested for impairment on an annual basis.
Associated undertakings are those investments other than
subsidiary undertakings where the Group is in a position to exercise a
signif cant infuence, typically through participation in the f nancial
and operating policy decisions of the investee. The consolidated
f nancial statements include the Group’s share of the post-acquisition
reserves of all such companies.
Going Concern
The directors have, at the time of approving the f nancial statements,
a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the
foreseeable future. Thus they continue to adopt the going concern
basis of accounting in preparing the fnancial statements. Further
detail is contained in the directors’ statement of going concern on
page 84 of the Directors’ Report.
Investments
In the Group’s fnancial statements, investments in associated
undertakings are stated at cost plus the Group’s share of postacquisition
reserves less provision for impairment.
Foreign Currencies
Transactions in foreign currencies are translated into sterling at the rate
of exchange at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date
are recorded at the rates of exchange prevailing at that date. Any gain
or loss arising from a change in exchange rates subsequent to the date
of transaction is recognised in the income statement.
The income statements of overseas operations are translated
into sterling at the average exchange rates for the year and their
balance sheets are translated into sterling at the exchange rates ruling
at the balance sheet date. All exchange diferences arising on
consolidation are taken to equity. All other translation dif erences are
taken to the income statement, with the exception of dif erences
on foreign currency borrowing and derivative instruments to
the extent that they are used to provide a hedge against the
Group’s equity investments in overseas operations, which are taken to
equity together with the exchange diference on the net investment
in those operations.
Goodwill and fair value adjustments arising from the acquisition
of a foreign entity are treated as assets and liabilities of the foreign
entity and translated at the closing rate.
Operating Profit
Operating proft is stated after charging exceptional items and after
the share of results of associates but before investment income and
f nance costs.
Exceptional items are items which are material or non-recurring
in nature, costs relating to acquisitions and the amortisation of
acquired intangibles.
Consolidated Financial Statements — 91