{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/720/908/#25-recognition","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"720","topic_title":"Other Expenses","subtopic":"720-908","subtopic_title":"Airlines","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Developmental Costs","paragraphs":[{"citation":"720-908-25-1","para":"25-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_19273C57-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Because of the current deregulated environment and the uncertainty regarding the recoverability of route <a href=\"/glossary/d/#developmental-costs\" class=\"term\" title=\"Developmental costs include those types of costs directly related to the development of new routes (or extension of existing routes), such as advertising and promotion expenses, related travel and incidental expenses, and expenses of regulatory proceedings.\"><span>developmental costs</span></a>, such costs related to the preparation of operations of new routes shall not be capitalized. </span></span><span class=\"sfragment\" id=\"sfr_19273D53-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Route expansion or alteration has become a recurring activity among the airlines, and any related cost shall be considered a normal and recurring cost of conducting business. </span></span></div></div>","snippet":"Because of the current deregulated environment and the uncertainty regarding the recoverability of route developmental costs, such costs related to the preparation of operations of new routes shall not be capitalized. Ro…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bdd049abbda9315c07905a1dfb644dd6d5e47e04cc3eacf29d81455df1d6954c","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:785aba6e2a4d528a0b26790aea437d636eb97e6a9f7484b40653a28ca9420031","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}},{"block":null,"heading":"Preoperating Costs","paragraphs":[{"citation":"720-908-25-2","para":"25-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_19273E31-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"><a href=\"/glossary/p/#preoperating-costs\" class=\"term\" title=\"Preoperating costs include flight crew training, maintenance training, prerevenue flight expenses, insurance, and depreciation. Preoperating costs relate directly to specific preoperating projects, such as the preparation for operation of new routes or integration of new types of aircraft.\"><span>Preoperating costs</span></a> shall be expensed as incurred rather than capitalized. </span></span></div></div>","snippet":"Preoperating costs shall be expensed as incurred rather than capitalized.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:60df1707a0d33c4fe513858c2d37f197ef858abfecb15bed54739c5a63fa7500","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c2303760398b31cea3bcb9eddf2260189eb6435aab7d1c5664ce00b2df247b3e","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}},{"block":null,"heading":"Overhaul Costs—Direct Expensing Method","paragraphs":[{"citation":"720-908-25-3","para":"25-3","html":"<div class=\"asc-body\"><div class=\"norm-text\">Paragraph <a href=\"/asc/360/908/#360-908-25-2\" class=\"xref\">908-360-25-2</a> provides guidance on accounting methods for overhaul expenses. <span class=\"sfragment\" id=\"sfr_19273F0B-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Most carriers recognize the cost of overhauls as expenses as they are incurred because, in the case of carriers with large fleets, such costs are relatively constant from period to period.</span></span></div></div>","snippet":"Paragraph 908-360-25-2 provides guidance on accounting methods for overhaul expenses. Most carriers recognize the cost of overhauls as expenses as they are incurred because, in the case of carriers with large fleets, suc…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:854e46f020397fe272e49e45eb804d0f203910ef1d9b31bde54b2fc22acc80e3","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c993c41b718bb00e4730b3151be0128656af6295170b42af64f2bab9c9e8e1cb","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}},{"block":null,"heading":"Rotables","paragraphs":[{"citation":"720-908-25-4","para":"25-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_19273FE0-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The cost of repairing rotables shall be charged to expense as it is incurred. See also guidance in paragraphs <a href=\"/asc/360/908/#360-908-35-2\" class=\"xref\">908-360-35-2</a> and <a href=\"/asc/360/908/#360-908-45-1\" class=\"xref\">908-360-45-1</a> concerning rotables. </span></span></div></div>","snippet":"The cost of repairing rotables shall be charged to expense as it is incurred. See also guidance in paragraphs 908-360-35-2 and 908-360-45-1 concerning rotables.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6a7b9675e764696af7a3953c56131d5965c4ce585552545bbcff16bd94e5be50","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:814806d489448f290cc9767b1d41fdd6a267754545c5909ebf8a782be2c9d72b","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a2ce8405724f491e03fb418f6d14e53f205c65dd44303f843ceb07b4bca8c909","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a2ce8405724f491e03fb418f6d14e53f205c65dd44303f843ceb07b4bca8c909","downloaded_from":"2026-09-10T01:09:37.136Z","last_downloaded_at":"2026-09-10T01:09:37.136Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478656","source_sha256":"686a91a80f7df9ff70f6f5a78a104d7136771b2a71475d96b73c196986c30769"}}