Looking to the key developments in International Financial Reporting Standards (IFRS) and US GAAP, this edition examines:
- The upcoming positive news on hedging for airlines – including the use of options as economic and accounting hedges, hedging of aviation fuel purchases and reduced compliance costs in terms of hedge accounting testing requirements.
- Where is the joint IASB and US Financial Accounting Standards Board (FASB) project on lease accounting up to?
- Maintenance accounting for leased aircraft – sometimes described as a dark art, we discuss the accounting considerations and include example disclosures.
The publication then moves into the complexity involved in airline co-operation, co-investment and mergers. We look at what is currently happening in the regulatory environment and offer some insights from other industries which have similarities in their regulatory environments.
Finally, we continue our benchmarking of full service/legacy airline cost bases to their low cost counterparts. This analysis looks at how the “low hanging fruit” has been plucked and where airlines are now in the cost reduction journey.
The financial reports and other analyses of the world’s top 25 airlines by revenue, and a select six of the largest lower cost airlines, were considered by KPMG’s Global Aviation practice professionals for the making of this report.