PIRON

 

Airline Industry

IFRS for the Airline Industry

Duration: 2 Days

The programme answers questions such as:

1. What accounting requirements apply to airline revenues, aircraft-related expenditures, and take-off and landing slot valuation?
2. When and how are required overhaul expenditures recognised on the financial statements?
3. How are guarantees disclosed and reported?
4. What financial statement presentation and disclosure requirements are particularly significant to airlines?
5. What are the pending issues and recent accounting pronouncements of interest to the airline industry?

Course Summary

This two-day course examines international financial reporting issues in detail and their effect on the airline industry.

Course Benefits

  • Be able to accurately account for required overhaul expenditures
  • Know how to apply appropriate recognition methods to multiple-element revenue transactions
  • Comply with financial statement presentation and disclosure requirements

Teaching Method

  • Identification of the critical issues affecting financial reporting in the airline industry
  • Succinct examples and cases that demonstrate classification and accounting for revenue, overhaul, aircraft and other airline-related transactions
  • Presentation and discussion of recommended financial statement disclosures
  • All participants receive copies of the presentation slides and course materials

Course Summary

Topics include:

  • Characteristics of the industry
  • Property, plant and equipment (cost and recognition, purchase incentives, valuation, impairment, depreciation, leased property)
  • Aircraft and other flight equipment (recognition, maintenance expenditures, airframe modifications, developmental and preoperating costs, rotable and expendable parts, aircraft sales)
  • Airframe and engine overhaul expense (recognition, accounting methods, leased aircraft, used aircraft)
  • Take-off and landing slots (recognition, valuation, amortisation, derecognition)
  • Inventories (types and components, valuation)
  • Revenue (functional classification of transport and transport-related revenues; the revenue cycle; recognising ticket sales revenue including consignment, multiple-element transactions, settlements between carriers/interline accounting, ticket refunds and exchanges; customer loyalty programmes; air cargo)

 

  • Flight personnel compensation (factors affecting cost, recognition)
  • Travel agent costs (commissions, credits, special incentives)
  • Accounting for joint marketing arrangements (characteristics, code-sharing, recognition)
  • Other operating expenses (flying operations, passenger services, reservations/sales/advertising, insurance, general and administrative, transport-related)
  • Government pass-through charges (aviation security, passenger facility charges)
  • Guarantees (characteristics, accounting treatment, disclosure)
  • Recent and upcoming issues (recently issued standards, interpretations and their impact on the airline industry)
  • Exposure Drafts that will affect the industry
  • IFRS-US GAAP convergence update
  • IASB-FASB projects and plans of interest to airline companies

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