Just me, but I think it’s unfair that we get charged twice for changing cabin configurations. Sure, I can see paying for the initial cabin installations and any changes, but I think it’s deeply wrong that we get charged for depreciation on the back end on something we’ve already paid for once on the front end.
Not sure if I understand correctly, but depreciation is calculatory, not something you get “charged”.
You pay for the changed cabin, the no longer needed elements are depreciated.
You’re not being charged twice. Depreciation only happens in accounting, it don’t actually pay anything.
To clarify, here’s hot it works:
- You install a cabin configuration and pay for it. It affects your bank account, but doesn’t show up in your profit and loss statement. Instead, the amount will show up on your balance sheet as flight equipment, because it’s no something you own.
- You remove the cabin configuration. This doesn’t affect your bank account at all, because you’ve already paid for it. Instead, the seats your’re throwing away just have to be accounted for in your balance sheet - as only at this time, the value disappears and will no longer be listed as flight equipment.
Hope this helps
Hi, It’s what happens to your financial statements. Depreciation does not affect your bank account
Gotcha. So, when we “buy” the cabin configuration, we pay for it out of our account and just hold it as an asset. When we change the configuration, or get rid of it, it becomes a loss, since we can’t recoup our investment.
Not like an aircraft, which, once we buy it, can be sold to get our money back.
Thanks for the explanation!