Course detail

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Contents

• Introduction
• Prerequisites
  
• Course Level
  
• Topics
  
• Course Benefits
  
• Teaching Method
  
• Continuing Professional Education
  
• Venue
  
  

Introduction

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The airline industry involves unique financial reporting challenges due to complex revenue arrangements, substantial aircraft investment, maintenance requirements, industry-specific intangible assets, and for many airlines, government pass-through fees. This two-day course examines international financial reporting issues in detail and their effect on airline companies. The programme dissects the critical issues that go beyond mere number-crunching and extends into the way that the airline industry conducts and shapes its accounting and reporting practices.

Through the use of examples, case studies, and real-world financial statements, course participants become familiar with the requirements and international best practices of airline accounting. IFRS of particular relevance to the industry are discussed. Specific guidance is found primarily in US GAAP from a variety of sources, including: Statement of Position (SOP) 88-1 Accounting for Development and Preoperating Costs, Purchases and Exchanges of Take-off and Landing Slots, and Airframe Modifications; Emerging Issues Task Force (EITF) Issue No. 00-21 Accounting for Multiple-Element Revenue Arrangements; the AICPA Audit and Accounting Guide (AAG) for the airline industry; and various other EITF consensus positions.

By reference to accepted accounting practices in the industry, participants leave this course with practical knowledge of the accounting standards that are applicable to the airline industry. Programme attendees, for example, learn how to apply revenue recognition requirements to complex multiple-element transactions, how to treat required overhaul expenditures, and how to determine the appropriate reporting for developmental and preoperating costs, in addition to gaining an understanding of the disclosure requirements and other issues that are unique to the airline industry.

This course expands participants' current knowledge of airline-industry accounting and also provides information on the most recent pronouncements affecting the sector and anticipated upcoming changes, as well as developing an awareness of issues that may arise during the convergence of IFRS and US GAAP requirements.

The programme answers questions such as:

• What accounting requirements apply to airline revenues, aircraft-related expenditures, and take-off and landing slot valuation?

• When and how are required overhaul expenditures recognised on the financial statements?

• How are guarantees disclosed and reported?

• What financial statement presentation and disclosure requirements are particularly significant to airlines?

• What are the pending issues and recent accounting pronouncements of interest to the airline industry?

Prerequisites

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Intermediate understanding of accounting principles based on any national standards.
No advance preparation is required for this course.

Course Level

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Overview

Topics

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• Characteristics of the Industry
• New entrants
• Expansion
• Service alterations
• Competitive environment
• Aircraft investment
• Maintenance requirements
• Terminal facilities
• Government relationships
• Airline classifications
• Property, Plant and Equipment - General
• 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 (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
• IFRIC 13 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 airlines
• Exposure drafts that will affect the airline industry
• IFRS-US GAAP convergence update
• IASB-FASB projects and plans of interest to airline companies

Course Benefits

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• Learn practical answers to typical airline-related questions on revenue recognition, aircraft-related expenditures, and intangible asset (take-off and landing slot) valuation
• Be able to accurately account for required overhaul expenditures
• Know how to apply appropriate recognition methods to multiple-element revenue transactions
• Understand reporting requirements for guarantees
• Comply with financial statement presentation and disclosure requirements
• Become familiar with significant recent and upcoming changes affecting the airline industry

Teaching Method

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• Live group instruction, with interactive participation encouraged
• 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
• Review of real-world financial statements to illustrate the application of accounting requirements
• Presentation and discussion of recommended financial statement disclosures
• All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials

Continuing Professional Education (CPE)

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16 hours

Venue

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All of our Dubai seminars take place in 4 star professional conference facilities, usually in city-centre downtown hotels like the Marriott, Sheraton or Hilton brands.

Detailed Joining Instructions are sent to all registered delegates by email approximately one month before the event. The Joining Instructions will confirm exact venue details and nearby (or onsite) hotel recommendations with bedroom rates where available.

Coffee and lunch will be provided.