International Airline Comparisons   Term Paper ID:37343 Click to get this paper

Essay Subject: Five airline companies each from a different country were compared in relation to inventory ...... More...

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Paper Abstract: Five airline companies, each from a different country, were compared in relation to inventory valuation and depreciation. Airlines include Alaska Airlines, Cathay Pacific Airways, Quantas, Turkish Airlines. Paper Introduction: analysis of selected financial statements in relation to selectedaccounting principles Introduction The annual financial statements of five airline companies are comparedthrough the analysis of the statements within the context of accountingprinciples The accounting principles used for comparison is limited tothose principles that are apparent through the review of the informationincluded in the financial statements The Five Airline Companies The five airline companies are based in five different countries Thecountries in which the airline companies are based affects how thecompanies treat and report Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Emirates states inventories at the loser of cost or market value.Consumer goods inventories are based on the FIFO method. Thecompany has the option of using the FIFO method. ReferencesAlaska Air Group, Inc. Thecountries in which the airline companies are based affects how thecompanies treat and report financial information because of the relevantfinancial reporting regulatory systems. The five airline companiescompared in this paper are as follows: o Alaska Airlines; based in the United States; reported as Alaska Air Group, Inc. The company expenses routine maintenance costs; however,major airframe and engine overhaul is capitalized and amortized tomaintenance expense. The moving weightedaverage method provides a more accurate representation of inventory value.Asset Depreciation Alaska Airlines records all capital assets at cost. Weighted averagecosts are determined for all other inventories. These methods of inventoryvaluation are the only ones available to the company. (2 5, February 22). Qantas values inventories at the lower of cost or market. The Five Airline Companies The five airline companies are based in five different countries. The company applies the straight-line depreciation methodto other capital assets. Qantas Annual Report 2 4. (2 5); for the fiscal year ending 31 December 2 4; the Capital Market Board (CMB) issues financial practice standards that are mandatory for all companies more than 1 shareholders; CMB standards tend to follow International Accounting Standards (IAS) Comparing the Airline Companies Two of the financial practices/principles use to compare the fiveairlines were (a) inventory valuation and (b) asset depreciation.Comparisons of the airline companies within these contexts are consideredin the following discussions.Inventory Valuation Alaska Airlines values expendable aircraft parts, materials, andsupplies at average cost. All capital assets are recorded at cost by Emirates. Turkish Airlines depreciates all capital assets on a straight-linebasis. Surplus inventory isvalued at the lower of cost or realizable value. The asset valuesare depreciated using the straight-line method based on the useful lives ofthe assets. Annual Report 2 4 Turkish Airlines. Istanbul, Turkey: Turkish Airlines Inc. (2 5, April 1). The company is requiredto report inventory consumption according to the FIFO method. Estimated residual valuesare incorporated into the depreciation determinations. Alaska Air Group Annual Report 2 4. Hong Kong, Special Administrative Region, China: Cathay Pacific Airways Limited.Emirates. Cathay Pacific records all capital assets at cost. Doha, Dubai: Emirates.Qantas Airways Limited. Emirates Annual Report 2 3. (2 4, August 3 ). Qantas records all capital assets at cost. Turkish Airlines values inventories at the lower of cost or realizablemarket value. analysis of selected financial statements in relation to selectedaccounting principles Introduction The annual financial statements of five airline companies are comparedthrough the analysis of the statements within the context of accountingprinciples. Useful lives for each capital asset are estimated for use inapplying the straight-line depreciation method. Asset values aredepreciated using the straight-line methods based on estimated usefullives. The companymay apply other methods to value inventories; however, Australian companiesare required to apply consistent inventory valuation methods over time. The accounting principles used for comparison is limited tothose principles that are apparent through the review of the informationincluded in the financial statements. Cathay Pacific values inventories held for consumption at (a) cost or(b) weighted average cost less an allowance for obsolescence, dependingupon the type of stock. Additionally, the company accrues anobsolescence allowance on expendable parts based on estimate disposal datesand salvage values. Cathay Pacific Airways Limited Annual Report 2 4. (2 5); for the fiscal year ending 31 December 2 4; the Securities and Exchange Commission governs the presentation of financial statements; the Financial Accounting Standards Board issues Statements of Financial Accounting Standards o Cathay Pacific Airways Limited; based in Hong Kong; reported as Cathay Pacific Airways Limited (2 5); for the fiscal year ending 31 December 2 4; the Companies Ordinance governs presentation of financial statements; the Hong Kong Society of Accountants issues Statements of Standard Accounting Practice o Emirates; based in Dubai; reported as Emirates (2 3); for the fiscal year ending 31 March 2 3; the United Arab Emirates, of which Dubai is a member, has a law that governs the presentation of financial statements for banks and financial institutions only; the Dubai Financial Services Authority publishes rules for financial reporting by companies o Qantas; based in Australia; reported as Qantas Airways Limited (2 4); for the fiscal year ending 3 June 2 4; the Australian Accounting Standards Board establishes mandatory practices for financial reporting o Turkish Airlines; based in Turkey; reported as Turkish Airlines Inc. Surplus inventories are reported as realizable valuesbased on market prices. The company applies anaccelerated depreciation to new aircraft and to some aircraft components,such as seats. The method used by the company to value expendableinventories likely provides a more accurate valuation than either FIFO orLIFO application would provide. (2 3, April 1 ). Asset values aredepreciated using the straight-line methods based on estimated usefullives. Mascot, New South Wales, Australia: Qantas Airways Limited.Turkish Airlines Inc. The company could opt to value expendableinventories by applying FIFO (first-in-first-out) or LIFO (last-in-first-out) methods. Estimated residual values are incorporated by the company into thestraight-line depreciation determinations. Estimated residual values are incorporated by the company into thestraight-line depreciation determinations. Seattle, Washington, USA: Alaska Air Group, Inc.Cathay Pacific Airways Limited. Aircraft parts, as an example, may becomeobsolete, where as jet fuel will not become obsolete. The company applies the moving weighted average method. (2 5, March 9). Useful lives for asset classes are prescribed by the InternalRevenue Service. Estimated residual values are incorporated intothe depreciation determinations. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

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