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Compare and contrast the depreciation accounting policies of Aviator and Eagle for the year ended 30 June 2012 and 31 March 2012 respectively.

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Compare and contrast the depreciation accounting policies of Aviator and Eagle for the year ended 30 June 2012 and 31 March 2012 respectively. Comment on the comparability of the results reported. In your response, acknowledge any key differences in the operations of these two competing airlines....

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Question Preview:

Compare and contrast the depreciation accounting policies of Aviator and Eagle for the year ended 30 June 2012 and 31 March 2012 respectively. Comment on the comparability of the results reported. In your response, acknowledge any key differences in the operations of these two competing airlines.

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The company uses the straight line method of depreciation on all assets except those of freehold and leasehold land. This is because in such cases, the useful life of the asset cannot be determined. The company uses the residual value in the owned assets so as to determine the depreciation over the remaining costs of the assets. The residual values which are used by the company are 20% because the company estimates that after the useful life of the assets, the assets can be disposed off for 20% of the total cost of the asset. Depreciation policy of Aviator by Raid Obudan on Prezi. (n.d.)

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