DATE: 12th September
This is a seminar directed at the Operations/Technical personnel, who otherwise would have little dealing with Accounting/Finance. Participants are assumed to have varying levels of technical knowledge of aircraft operations within aircraft leasing industry and may have some financial knowledge and understanding.
Ensure that all participants are
- Acquainted with accounting for accounting for technical aspects of aircraft leasing including main US GAAP and IRFS accounting pronouncements and regulations.
- Through provision of worked examples, provide participants with simple examples of accounting issues.
- Provided with new accounting updates for relevant accounting impacting Technical aspects of Aircraft Leasing.
A number of key topics and concepts will be presented covering both U.S. GAAP and IFRS treatment impacting both lessors and lessees including:
- 1. Maintenance:
- Types of maintenance for Accounting Purposes – Heavy (Airframe, Landing gear, APU, Engines, LLPs), Suggested Other (Light) Maintenance and Suggested Repair and Maintenance (expense);
- Maintenance Rights Asset
- Airworthiness Directives and Service Bulletins
- Options to account for Maintenance expenditure including use of Supplemental (additional) Rent
- Amortization / depreciation of maintenance cost over asset life vs lease life
- Revenue recognition considerations for maintenance obligations
- Lessor contributions
- Cashflow presentation for maintenance expenditure
- Typical heavy maintenance payments (examples)
- 2. Impairment
- Impact of Appraisers /appraisal values on Impairment calculations (market value v book value)
- Indicators of impairment
- Use of Discounted vs Undiscounted cashflows
- Impact of Half-life v Full life when assessing impairment
- 3. Acquisition of an Aircraft – Business Combination or Acquisition of an Asset(s)
- Intangible Lease premium or discount on acquisition
- 4. Depreciation of aircraft including determination of useful life and component depreciation
- 5. Considerations for disposal of Long lived assets:
- Sales of aircraft –consideration of various elements to be included within the gain on sale
- Presentation of gain on sale with financial statements
- Estimated Net realisable value for disposal considerations
- Lease end adjustments e.g. redelivery compensation
- Definition of liabilities/ extinguishment of liabilities
- 6. Other Aspects
- Repossession and Redelivery costs
- Overview of new lease accounting revenue recognition impacts for lessors and lessees
|Control Consultant: Octagon Aviation Capital Ltd (NASDAQ: OCT), a former Irish tax resident, aircraft leasing company, was recently delisted from NASDAQ. In contemplation of a proposed U.S. listing and SEC-registered initial public offering by this Irish tax resident aircraft lessor, primary role involved the design of an internal control environment, structuring of all financial reporting, taxation, securitization and administration with an outsourced services provider and compilation of a detailed US GAAP Accounting Manual /database.|
The Aviation Finance Finuas Network is funded by member companies and the Finuas Networks Programme, an initiative of Skillnets funded from the National Training Fund through the Department of Education and Skills.
Click here for Finuas Network website www.finuas.ie