| Course Content |
Aircraft Lease Accounting Outline
9.00am – 9.45am Introduction
- Brief introduction to course leader
- Brief discussion on aircraft leasing industry ; key issues / risks today
- Brief discussion on consequent critical accounting topics / issues today and highlight which aspects we will cover
9.45am – 11.30am Fixed Asset Accounting (i.e. aircraft for this industry)
- Acquisition accounting (fair value, business combination)
- Lease accounting (operating versus finance leases)
- Discussions around depreciation profiles, useful economic lives, residual values
- Discussions on aircraft appraisals (diversity, application, pros and cons)
- Other issues to consider (maintenance accounting policy and how that interfaces with assets values)
- Diversity of treatment (overview and discussion of asset accounting by public and other lessors)
11.30 - 11.45 Coffee break
11.45 – 1.30pm Impairment
- Brief overview of IFRS impairment provisions
- General approach to impairment by lessors (frequency of testing, initial assessment (Step 1), detailed cash flow testing (Step 2 if necessary))
- Discussion on most significant issues and their implications (e.g. market / aircraft / transaction related issues, use and application of appraisals, estimating cash flows, discount rates, maintenance cash flows)
- Brief discussion on IFRS v US GAAP and the implications
- Overview and discussion of recent impairments in the sector
1.30 – 2.30pm Lunch
2.30 – 4.00pm Maintenance Accounting
- Background to maintenance reserves (what are they, why we need them, touch on dynamics of negotiation, pricing, credit related, economic benefit)
- Genesis of maintenance accounting (e.g. airline guide, different potential accounting treatments, US GAAP v IFRS, application in the current market across the lessor community)
- Issues when considering maintenance accounting policies (pros and cons, revenue recognition, income statement comparison, overall asset / balance sheet values (link with asset accounting and impairment), tracking asset or lease lives, anomalies (e.g. income bump on default), lessor contributions)
- Overview and discussion of treatment within the sector
4.00 - 4.15pm Coffee
4.15 - 5.00pm Proposed Lease Accounting changes
- Summary of why potential changes arose and the current status and timing of the project
- Broad based discussion around the likely lessor accounting implications (income statement and balance sheet implications, transition accounting, impairment implications, financial assets etc)
5.00 - 5.30pm Q&A / Wrap-up
Other potential topics that may be of interest
- Running a successful aircraft leasing Finance department
- Improving how Finance support the Board / Audit Committee / Business (frequency, consistency, charters, information preparation and timing, improving management packs and other key information, metric reporting and assessment)
- The internal control environment (rolling out, improving, documenting, adhering to a right-sized control environment and the benefits thereof)
- Key metric analysis (consideration of pricing, financial and operational metrics, the understanding, assessment and reporting of same (pros / cons)
- Peer group reviews |
