30. Transition to IFRS

As stated in note 2, these are the Group’s first consolidated financial statements prepared in accordance with IFRS.

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 30 March 2016, the comparative information presented in these financial statements for the year ended 25 March 2015 and in the preparation of an opening IFRS balance sheet at 27 March 2014 (the Group’s date of transition).

In preparing its opening IFRS balance sheet, the Group has adjusted amounts reported previously in financial statements prepared in accordance with Irish GAAP (previous GAAP). An explanation of how the transition from previous GAAP to IFRSs has affected the Group’s financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.

The key adjustments on transition to IFRS relate to:

• Derivatives and hedge accounting;
• Investment property fair value movement;
• Re-opening of business combinations;
• Presentation of discontinued operation; and
• Pension interest income adjustment.

Income statement reconciliation from Irish GAAP to IFRS

Statement of total comprehensive income reconciliation from Irish GAAP to IFRS

Opening FY15 Balance Sheet reconciliation from Irish GAAP to IFRS

Closing FY15 Balance Sheet reconciliation from Irish GAAP to IFRS

A. Investment property

In accordance with Irish GAAP all fair value movements on investment property are recognised in reserves. Under IFRS, these fair value movements are recognised in the income statement. In addition a deferred tax liability is recognised for potential capital gains tax. This liability was not permitted to be recognised under Irish GAAP.

B. Goodwill

The Group has restated business combinations post 2006.

• Under IFRS, the AES goodwill would have been allocated to customer list intangible assets that would have been fully amortised by the beginning of FY15 therefore requiring no amortisation in FY15.
• Under IFRS the PowerGen goodwill would have been allocated to the customer contracts with the ESB that would have been fully amortised by the end of FY16. This is shorter than the amortisation period was under Irish GAAP, thereby requiring higher amortisation in FY15.
• Deferred tax related to these acquisitions was also recognised on transition to IFRS.

C. Pension

The net defined benefit pension liability recognised on the balance sheet is the same under IFRS as it was under Irish GAAP. In accordance with Irish GAAP the interest income on plan assets was calculated using the expected return on plan assets. Under IFRS, the interest income on the plan assets is calculated using the liability discount rate. The lower discount rate means lower interest income recognised in the income statement. A corresponding gain is recognised in other comprehensive income to leave net liability unchanged.

D. Discontinued operations

In accordance with Irish GAAP detailed line by line information was provided on this discontinued operation on the face of the Income Statement. Under IFRS the results of Anua are presented in a single line item on the face of the income statement “loss on discontinued operations”. The detailed line-by-line information that was provided on the face of the income statement under Irish GAAP is presented in the notes under IFRS. This is a presentation change only and there is no change to the net loss recognised in the income statement.

E. Unsecured loan notes

In accordance with Irish GAAP, the U.S. dollar debt held was measured at the contracted rate. Under IFRS, the US dollar debt is remeasured to Euro at each reporting date using the spot foreign exchange rate at that date.

In accordance with Irish GAAP the Group’s cross currency interest rate SWAPs were not recognised on the balance sheet. On transition to IFRS these derivatives were recognised at their fair values.

The Group has decided to apply cash flow hedge accounting for the derivatives related to the unsecured loan notes.

F. Foreign currency

On transition to IFRS the Group has availed of the optional exemption to reset the foreign currency translation reserve to nil. As the Group was including these reserves in retained earnings under Irish GAAP, this resulted in no adjustment on transition to IFRS.

Cash flow statement

There are no material differences between the cash flow statement presented under IFRS and the cash flow statement presented under Irish GAAP.