# ASC 360-908-25: Property, Plant, and Equipment — Airlines — 25 Recognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/360/908/#25-recognition)

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## ASC 360-908-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/360/908/#25-recognition)

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#### Airframe Modifications

##### [360-908-25-1](https://asc.understandingaccounting.org/asc/360/908/#360-908-25-1)

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If the modifications of interior configurations of certain aircraft types enhance the usefulness of the aircraft, the costs associated with the changes shall be capitalized.

#### Overhaul Costs

##### [360-908-25-2](https://asc.understandingaccounting.org/asc/360/908/#360-908-25-2)

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Air carriers shall adopt an accounting method that recognizes overhaul expenses in the appropriate period. This may result in different methods for different aircraft, as well as different methods for [airframe](https://asc.understandingaccounting.org/glossary/a/#airframe "The structure of an aircraft, excluding engines and accessories. The principal parts of the airframe of an airplane include the fuselage (the body), wings, empennage (the assembly of stabilizing and control surfaces at the tail), landing gear, and nacelles or pods (engine housings).") overhauls and engine overhauls. The method chosen shall recognize, among other things, the carrier's operating practices with respect to airframe and engine overhauls. The following accounting methods are permitted:

1.  a
    
    The direct expensing method, addressed in Subtopic 908-720 (see paragraph [908-720-25-3](https://asc.understandingaccounting.org/asc/720/908/#720-908-25-3))
    
2.  b
    
    The built-in overhaul method, addressed in this Subtopic
    
3.  c
    
    The deferral method, addressed in this Subtopic.
    

As indicated in paragraph [360-10-25-5](https://asc.understandingaccounting.org/asc/360/10/#360-10-25-5), the use of the accrue-in-advance (accrual) method of accounting for planned major maintenance activities is prohibited in annual and interim financial reporting periods.

##### [360-908-25-3](https://asc.understandingaccounting.org/asc/360/908/#360-908-25-3)

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##### [360-908-25-4](https://asc.understandingaccounting.org/asc/360/908/#360-908-25-4)

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