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TOPIC 8: ACCOUNTING FOR AVIATION / AIRLINE INDUSTRY - Coggle Diagram
TOPIC 8: ACCOUNTING FOR AVIATION / AIRLINE INDUSTRY
Nature
Activities
Form partnership
Alliances with other airlines for
codeshare agreement
(combine the flights from another country's airline - combine passengers)
Utilize aircraft to supply these services.
Authority
: Civil Aviation Authority of Malaysia (CAAM)
Exercise
safety regulatory oversight
of the civil aviation
Regulate
the operation of aviation services
Responsible to s
afeguarding civil aviation operations
in the country
Facilitates
in Malaysia
Definition
: a company that provides air transport services for traveling passengers and freight (goods)
Acc. Issues in Aviation Industry
(main issues: sale in advances)
Revenue recognition
: MFRS15 Revenue from Customer with Contract
satisfies performance at
a point in time
(if not satisfied over time)
Transfer control
over time
The entity's performance
creates / enhances an asset
that the customer controls as the asset is created / enhance
(i) The entity's performance
does not create an asset with an alternative use
to the entity AND (ii) the entity has an
enforceable right to payment
for performance completed to date.
The customer simultaneously
receives and consumes
the
benefits provided by the entity's performance
as the entity performs
When?
: it
transfer control
over a product / service to customer (customer dh naik flight)
Types:
Revenue from
freight services
(cago business)
distinct
(different) performance obligation
Recognized upon the
completion of services rendered, net of discounts
Other income
Customer loyalty programme
Definition
: where members (customers)
accumulate points
for purchases made which entitle them to
discounts on future purchases.
Revenue from t
he award points
Upon
issuing the points=
deferred revenue
(trade and other payables)
Upon
redemption
of loyalty points =
revenue
Revenue amount
Computed based on the
number of points redeemed
The
redemption value of each point
(weighted average basis)
Revenue associated with
the sale of points to merchant partners
= when the
obligation is completed
(customer claim)
Breakage
Definition: The estimated
loyalty points
that are
not expected to be redeemed by members
Account:
Deferred breakage
(trade & other payables)
Revenue amount
Based on the
number of loyalty points redeemed
in a period in relation
to the total number expected to be redeemed.
Estimated by managemen
t - based on terms & conditions of membership & historical accumulation & redemption patterns
Revenue
from passenger
Recognizes when the
air transportation service is provided
Dt Sale in revenue, Ct Revenue
Record:
Net of discounts
the related ancillary (sampingan) revenue
Assigned seat
Cancellation
Baggage fee
Documentation and other costs
Administrative fees
on board sale of meals and merchandise
airport & insurance surcharge
Selling prices
Account:
Sales in advance
(current liabilities) - Flight tickets are sold in advance to the actual flight date.
Dt Cash, Ct Sale in advance
Contract modification % add distinct
goods / services = separate contract
Relates to
scheduled passenger flight & charter flight
income
Lease of aircraft
( x masuk silibus)