bean counting...
Hi all,
A question re cost accounting:
I'm a little unclear on the relationship between book or market depreciation, and maintenance overhaul reserve.
Let's say I buy an R44. Being prudent, I want to apportion the 100, 2000, and 2200 overhaul costs across the actual operating time. I would also want to depreciate the value of the aircraft over, say, 5-years. But with the maintenance reserve, if I spend that at the appropriate time, then effectively (not really but for the sake of the argument) I have a 'new', or zero time aircraft. So it seems to me that if I apportion both depreciation AND maintenance overhaul costs, it unnecessarily adds a significant cost per hour, or double-dipping.
Anyone provide some advice as to how they do it?
Many thanks.