Is it the possible that an airline can make a huge multi-frame order and secure a knock-down price; then take delivery and sell the a/c to subsidiary leasing company at full book and thus show an instant profit, and then lease the airframe back on a 7-10 year program.
Or purchase the airframe at a knockdown price; show it at full book value as an asset thus realising an instant paper profit; and then amortise it over 20 years on the books. Each year the 'asset' is revalued slightly less, but still above the original purchase price, so the after 7-10 years it is valued at the original purchase price and sold to the 2nd hand market for that price having cost very little.
Just a thought as there seem to be some creative constructions out there, and not just in aviation.
A question: how can a capital cost item not be included in a balance sheet? Is it an asset or not? But then again, if the airline doesn't own the airframe it's not an asset, but is rented. However, who bought it originally?
I was told at the time that BAF, as was, didn't own anything: even the office furniture was leased from outside BAF's accounts. Every engine & airframe was owned by an outside concern.
I hope some of our creative accountants can enlighten us.