Depreciation at delta airlines and singapore airlines

option #1 depreciation at delta air lines and singapore airlines

Here having current technology in the airplanes may be relevant to Singapore Airlines in implementing this strategy. The interest expense alone has an impact on income before income taxes.

Time line also provides an insight into the progressive challenges the company is facing in the case study. You have to recommend business unit level recommendations.

depreciation at delta air lines the fresh start case solution

If Delta Airlines assumed the depreciation assumptions of Singapore Airlines, Delta's depreciation expense would increase 6. Order Now.

why does delta airlines use a different depreciation policy relative to singapore airlines

Fred Barbee 39 Theoretical Justification Depreciation at Delta Air Lines and Singapore Airlines April 19, Theoretical Justification The matching principle requires the cost of an asset be charged to expense in the periods benefited.

Singapore Gains: There is a tax benefit to depreciating assets more rapidly through lowering the net income annually. Step 8 -Implementation Framework The goal of the business case study is not only to identify problems and recommend solutions but also to provide a framework to implement those case study solutions.

Depreciation at delta airlines and singapore airlines (b) solution

Economic Sacrifice Approaches Historical cost less accumulated depreciation. The loss is in net income because of the higher expense. Taken these assumptions as given, it would be proper to have different depreciation schedules for the two companies. Average age can be computed as a ratio of accumulated depreciation divided by the annual depreciation expense. Evaluate each detail in the case study in light of the HBR case study analysis core ideas. It also provides starting ideas as fundamentals often provide insight into some of the aspects that may not be covered in the business case study itself. We are also not concerned with how they depreciate for tax purposes — only financial accounting. Additionally, it may be inferred that climate and weather may affect the life of an aircraft and this too may account for the difference between Delta and Singapore. Singapore Gains: There is a tax benefit to depreciating assets more rapidly through lowering the net income annually.

Once done it is time to hit the attach button. You can use the following strategy to organize the findings and suggestions.

Depreciation at delta airlines and singapore airlines (b) solution

Time line can provide the clue for the next step in organization's journey. Step 8 -Implementation Framework The goal of the business case study is not only to identify problems and recommend solutions but also to provide a framework to implement those case study solutions. The change in depreciation comes from a review of the operational lives and residual values of the aircraft fleet. Focus on the following - Zero down on the central problem and two to five related problems in the case study. If Delta Airlines assumed the depreciation assumptions of Singapore Airlines, Delta's depreciation expense would increase 6. Expansion leads to newer fleets meaning newer, longer lasting technology resulting in a change in the company's depreciation strategy. Exhibit 1 shows that there is an increase in the depreciation expense of 3. This leads to either missing details or poor sentence structures. Be very slow with this process as rushing through it leads to missing key details. This may have an effect on the amount of depreciation expense that they record. The same deal may or may not be done today for a couple of reasons. Often history is provided in the case not only to provide a background to the problem but also provide the scope of the solution that you can write for the case study. You can use the following strategy to organize the findings and suggestions. You should make a list of factors that have significant impact on the organization and factors that drive growth in the industry. Business case study paragraph by paragraph mapping will help you in organizing the information correctly and provide a clear guide to go back to the case study if you need further information.

Analysis: The overall strategy of Singapore Airlines may be related to their commitment to maintaining their high rankings for customer service amongst business commuters. Additionally, it may be inferred that climate and weather may affect the life of an aircraft and this too may account for the difference between Delta and Singapore.

Why does delta airlines use a different depreciation policy relative to singapore airlines

Also, the interest rate today has been at an all time low. Fred Barbee 11 Depreciation at Delta Air Lines and Singapore Airlines April 19, Depreciation Defined The process of allocating the cost of property, plant, and equipment as an expense in a systematic and rational manner to those periods expected to benefit from the use of the asset. Time line also provides an insight into the progressive challenges the company is facing in the case study. Reading up the HBR fundamentals helps in sketching out business case study analysis and solution roadmap even before you start reading the case study. So instead of providing recommendations for overall company you need to specify the marketing objectives of that particular brand. FMC's restructuring plan aimed at eliminating a takeover attempt, giving FMC employees a greater stake in the company and its future by expanding employee ownership, and to invest aggressively in existing businesses and concentrate on current and related businesses. Expansion leads to newer fleets meaning newer, longer lasting technology resulting in a change in the company's depreciation strategy. Often readers scan through the business case study without having a clear map in mind. The scope of the recommendations will be limited to the particular unit but you have to take care of the fact that your recommendations are don't directly contradict the company's overall strategy. To be a financial success, FMC would need to show that it could continue to pay down its debt using the cash generated from its operations. My case study strategy involves - Marking out the protagonist and key players in the case study from the very start. Both use a straight line depreciation method to depreciate the value of the fleet on the Balance Sheet.

This could be because the effective change in depreciation didn't occur until April 1, and the income statement is dated for the year ending June 30, The next step is organizing the solution based on the requirement of the case.

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Singapore and Delta Airlines Discussion Essay