Depreciation at Delta Air Lines and Singapore Airlines

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1. Calculate the annual depreciation expense that Delta and Singapore would record for each $100 gross value of aircraft. Depreciation = (Asset value - Residual Value) / Asset life , Asset price as $100 Delta Airlines | |Before July 1,1986 |Between July 1,1986 and |April 1, 1993 Onwards | | | |March31, 1993 | | |Asset Value |100 |100 |100 | |Residual Value |10% (100) =$90 |10% (100) =$90 |5% (100) =$5 | |Asset Life |10 |15 |20 | |Depreciation |$9 |$6 |$4.75 | Singapore Airlines | |Prior to April 1, 1989 |After April 1, 1989 | |Asset Value |100 |100 | |Residual Value |10% (100) =$90 |20% (100) =$20 | |Asset Life |8 |10 | |Depreciation |$11.25 |$8 | 2. Are the differences in the ways that two airlines account for depreciation expense significant? a) Yes, they are using significant different ways of calculating depreciating value

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