Deprecation At Delta Airlines And Singapore Air Lines

Deprecation at Delta Airlines and Singapore Air lines

Depreciation helps  match the expense of using long lived assets with the revenues the assets helped to produce> what means is that Delta ns Singapore pole Air line depreciates one of  its airplanes, it is trying  to match the cost of air flight to the revenue that air craft helped to produce. Because air crafts can be an item used for more than one income statement period, Delta and Singapore Airlines don't recognize the air crafts entire cost as an expense immediately. Instead, the companies record them as assets on the balance sheet. Then, in each year of the assets useful life, the companies should recognize a portion of the Item's costs as an expense.

At the end of the useful life of fixed assets the businesses will dispose, and any amount received from disposal will represent its residual value. This may be difficult to estimate in practice. How ever, an estimate has to be made. If it is unlikely to be significant amount, a residual value of zero will be assumed. The cost of fixed assets less its estimated residual value represents the total amount to be depreciated over its estimated useful life.

Delta Air Line
Item    Prior to July 1, 1986    July 1, 1986-march 31, 1993    April 1, 1993- present
Method    Straight line    Straight line    Straight line
Residual Value    10%    10%     5%
Useful Life    10years      15years    20 years
Depreciation expense per $100 of  gross  air craft value( annually)    $100 x 0.1 = $10
$100-$10  = $90
$9 ...
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