preoperating costs

Expenses1

1. 720-908Airlines720 Other Expenses

   ASC 720-908 governs how airlines account for route developmental costs, preoperating costs, and certain maintenance/overhaul costs. The core rule is expense-as-incurred: because route expansion is a normal, recurring activity in a deregulated environment with uncertain recoverability, these costs may not be capitalized. It also addresses the direct expensing method for overhauls and the cost of repairing rotables.