# ASC 360-908-30: Property, Plant, and Equipment — Airlines — 30 Initial Measurement

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/360/908/#30-initial-measurement)

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## ASC 360-908-30: 30 Initial Measurement

[Read section](https://asc.understandingaccounting.org/asc/360/908/#30-initial-measurement)

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#### Overhaul Costs

##### [360-908-30-1](https://asc.understandingaccounting.org/asc/360/908/#360-908-30-1)

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This guidance addresses the following methods of accounting for overhaul expenses:

1.  a
    
    Built-in overhaul method
    
2.  b
    
    Deferral method.
    

The direct expensing method is addressed in Subtopic 908-720 (see paragraph [908-720-25-3](https://asc.understandingaccounting.org/asc/720/908/#720-908-25-3)).

##### [360-908-30-2](https://asc.understandingaccounting.org/asc/360/908/#360-908-30-2)

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The built-in overhaul method is based on segregation of the aggregate aircraft costs into those components that shall be depreciated over the useful life of the aircraft and those that require overhaul at periodic intervals. Thus, the estimated cost of the overhaul component included in the purchase price shall be set up separately from the cost of the [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).") and engines.

##### [360-908-30-3](https://asc.understandingaccounting.org/asc/360/908/#360-908-30-3)

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Under the deferral method, the actual cost of each overhaul shall be capitalized.