management control system case文档.ppt

Behavioral Implications of Airline Depreciation Accounting Policy Choices  Miao Yiyu Liu Hong Chen Dan Wang Jiachen Wang Meng Outline Introduction A Third Set Of Book? More Liberal Or Conservative? Depreciation Manager Decisions Introduction 0 Conservative Liberal More Depreciation Less Depreciation ⌘ ⌘ Nonstop you －Lufthansa Frankfurt, Germany 50% PPE 50% other assets Keep climbing —Delta Atlanta, Georgia, USA BEFORE 1986 10% residual value 10-year life 1986 10% residual value 15-year life 1993 5% residual value 20-year life Fort Worth, Texas, United States 1999 5% residual value 20-year life 10% residual value 25-year life Reduce depreciation expense $158 million A Great Way to Fly -Singapore Airlines Singapore -1989 10% residual value 8-year life 1989-2001 10% residual value 15-year life 2001- 10% residual value 15-year life ∞ An aircraft can fly indefinitely ★ Take advantage of tax rules F A T C  Difficult to estimate economic life 90% Maintain high original value Influences Of Depreciation On Management Decisions 1.a-d  a. Replacement of aircraft Factors that affect aircrafts’ lives: Company strategy Delta—utilizes older aircrafts; MRO organization Singapore—maintains a young fleet; renews frequently Economic environment prosperity VS downturn Technological development fuel efficiency; noise; comfort How can depreciation policy affect this decision? Choices of Depreciation policy Conservative Liberal (dep. more) (dep. less) Depreciation pattern Accelerated S-L Estimated useful life 12-25years Indefinitely Residual value 5%-15% 50%-90% Absorb the write-off of the remaining book value Gain on asset disposal  a. Replacement of airc