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Although Singapore Airlines (SIA) and Delta Airlines ( dal) operate in the equivalent industry, apiece respiratory tract takes a diametrical approach to depreciating dogged assets. SIA depreciates its passenger personal consultation linecraft over 10 recollective time on a swell line basis to 20% residual, while dekaliter does the aforementioned(prenominal) at 20 days to 5% residual. The difference in accounting practices tail assembly be attributed to the customer segment severally airline serves: SIA serves premium long haul customers and dal serves step short haul customers. In severalise to offer a premium level of service, SIA has to curb newer airplanes. Hence, the approximate age of the ignite is 5-6 years and is depreciated over a shorter lifespan. By depreciating to a 20% residual value, SIA can alike gain a higher(prenominal)(prenominal) level of surplus on the books to help encourage gains on sales. The 20% can also be justify because SIA operates long haul flights, essence the airplanes argon in the air womb-to-tomb and requires less maintenance out-of-pocket to the wear and rub from fashionable take-offs and landings. Comparatively, dal, which offers standard service, does not ask an advanced fleet.

Hence, DAL keeps its airplanes interminable than SIA and the residual value is impose because of more frequent take-offs and landings. On further analysis, SIA incurs an $8 disparagement expense for every(prenominal) $100 washed-out on an airplane and DAL incurs $4.75. From an practicable standpoint, SIA can contribute to depreciate at a higher rate because its institutionalise factor is greater than DALs (76.8% vs 72.9%). Furthermore, SIAs revenue per passenger is higher than DALs (SIA $6672000000/15002000=$444, DAL $15657000000/119930000=$130), meaning SIA can weather a higher depreciation rate.If you compulsion to get a full phase of the moon essay, order it on our website: Orderessay

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