Audit An unqualified independent auditor's report was provided to the members of Lobo Leasing UK Limited. The audit report was signed by Brian O'Callaghan FCA (Senior Statutory Auditor) for and on behalf of Deloitte Ireland LLP Basis of preparation The financial statements have been prepared in accordance with IFRS as adopted by the EU. They have been prepared on a going concern basis under the historical cost convention and may be modified by the valuation of certain financial assets and liabilities at fair value through the statement of comprehensive income. Functional and presentation currency The financial statements of the Company are presented in USD, which is the functional currency of the Company. All financial information presented in USD has been rounded to the nearest thousand. The directors of the Company believe that USD most faithfully represents the economic effects of the underlying transactions, events and conditions. Estimates and judgements The preparation of the financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes: Taxation The taxation charge recognises amounts due to tax authorities in the various jurisdictions in which the Company operates. It includes estimates based on a judgement regarding the application of tax law and practice and the availability of future profits in order to determine the quantification of current liabilities.In arriving at such estimates, management assesses the relative merits and risks of tax treatments assumed, taking into account statutory, judicial and regulatory guidance and, where appropriate, external advice. Foreign currency transactions Transactions in foreign currencies are translated to USD at exchange rates at the dates of the transactions. Assets and liabilities denominated in foreign currencies are translated into USD at the exchange rate ruling at the reporting date, with differences arising recognized as profit or loss in the statement of comprehensive income. Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability of another entity. Financial instruments may be further analysed between current and non-current depending on whether these will fall due within 12 months after the balance sheet date or beyond. Financial assets: This classification depends on the business model and the contractual terms of the cash flows. Financial assets that are held to collect contractual cash flows where those cash flows represent solely payments of principal or interest are measured at amortised cost.Financial assets measured at amortised cost are principally trade receivables. At initial recognition the Company measures financial assets at fair value plus (except for those at fair value through profit or loss) transaction costs. On initial recognition the Company classifies its financial assets in the following measurement categories: -Those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss)- Those to be measured subsequently at amortised costThe Company’s financial assets comprise trade and other receivables, cash and cash equivalents and loans receivable and derivative instruments. The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. On derecognition of a financial asset, the difference between the carrying amount of the asset and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss. Relevant costs incurred with the disposal of a financial asset are deducted in computing the gain or loss on disposal. Financial liabilities: These are initially recognised at the fair value of the considerations received less directly attributable transaction costs. Subsequent to initial recognition, financial liabilities are recognised at amortised cost. The difference between the recognition value and the redemption value is recognised in the income statement over the contractual terms using the effective interest rate method. This category includes trade and other payables and borrowings. Financial liabilities are derecognised in full when the Company is discharged from its obligation, they expire, or they are replaced by a new liability with substantially modified terms. Effective interest method: The Company uses the effective interest method of calculating the amortised cost of a debt instrument and of allocating interest income and expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or liability, or, where appropriate, a shorter period, to the gross carrying amount of a financial asset or the amortised cost of a financial liability. Impairment of financial assets: The Company recognises a loss allowance for expected credit losses on debt instruments, trade receivables and other financial assets. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. IFRS 9allows entities to apply a ‘simplified approach’ for trade receivables, contract assets and lease receivables. The simplified approach must be used for trade receivables with no significant financing approach and the Company has chosen to apply this to all trade receivables as only some minor receivables have a financing component. The simplified approach allows the recognition of lifetime ECL on all these assets without the need to identify significant increases in credit risk. Lifetime ECL represents the ECL that will result from all possible default events over the expected life of a financial instrument. Lease expense The Company, as a lessee, leases aircraft under operating leases and records rental expense on a straight line basis over the life of the lease as it is incurred. The Company accounts for lease rental expense under lease agreements on a straight line basis over the lease term. Income tax Income tax expense comprises of current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case the related tax is also recognised in other comprehensive income or equity respectively.