Statements of Position

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Description

Until certain practical limitations and cost benefit considerations have been overcome, the incremental cost of providing free travel awards generally should be accrued when the award levels are achieved. Developmental costs related to preparation of operations of new routes should not be capitalized as previously permitted under the AICPA Industry Audit Guide, Audits of Airlines. The costs of acquiring take-off and landing slots are identifiable intangible assets that should be accounted for in conformity with Accounting Principles Board (APB) Opinion No. 17, Intangible Assets. The costs associated with airframe modifications that enhance the usefulness of the aircraft should be capitalized and depreciated over the lesser of the estimated useful lives of the aircraft or the modifcations.

Publication Date

1987

Relational Format

Book

Keywords

Airlines -- Accounting

Disciplines

Accounting | Taxation

Comments

Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants.

Proposed statement of position : Accounting for frequent travel award programs, developmental and preoperating costs, purchases and exchanges of take-off and landing slots, and airframe modifications ;Accounting for frequent travel award programs, developmental and preoperating costs, purchases and exchanges of take-off and landing slots, and airframe modifications; Exposure draft (American Institute of Certified Public Accountants), 1987, June 30

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