This Subtopic provides guidance for accounting for certain property, plant, and equipment assets for entities in the airline industry. It includes guidance on:
- a
The use of unit and group depreciation methods.
- b
- c
Airframe modifications. Airlines have undertaken major programs to modify interior configurations of certain aircraft types—including the reconfiguration and replacement of seats, galley equipment, and storage space—in response to market forces and passenger demands. Since deregulation, such changes have been more frequent. - d
Airframe and engine overhauls. As a result of overhaul requirements established by the Federal Aviation Administration, aircraft airframes and engines must be overhauled within specific intervals. The value and usefulness of an aircraft can be heavily dependent on its stage of overhaul. For accounting purposes, airframe and aircraft engine overhauls encompass all inspections or replacements of major components, which the civil air regulations require at specific maximum periodic intervals to recertify that the frame or engine is completely airworthy.