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Author Topic: airplane lease amounts  (Read 691 times)

Offline B7573

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  • Posts: 725
airplane lease amounts
« on: March 08, 2014, 09:35:20 AM »
Normaly when you lease an aircraft you pay 4 months up front of the lease price. After 4 months you start to pay the normal monthly lease fee.
At the moment i have 6 lease aircraft i have paid 4 months upfront of the lease price per aircraft. But i have checked my income statement.
And i see that i already started to pay each week for the lease per aircraft. But i do not have the aircrafts not yet in operations for 4 months.
This means i pay double at the moment. My question is are there more people having this problem?

Offline Infinity

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    • Aviation Awareness
Re: airplane lease amounts
« Reply #1 on: March 08, 2014, 11:30:28 AM »
You are not paying double, but you are misreading the financial statements. The lease prepayment is spread over its duration in the Income Statement, it is only a one-off in the Cash Flow Statement.

Offline dmoose42

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Re: airplane lease amounts
« Reply #2 on: March 08, 2014, 11:52:48 AM »
To clarify a bit more, when you lease the plane, your four month payment is accounted for on your balance sheet as a prepaid asset and the cash is deducted.  There is no expense on your income statement.  Each day, the day's lease payment is deducted from the asset on your balance sheet and accrued as an expense.  No cash is deducted.  Once the four months are up, then the lease payments are deducted from cash.

So it may be a bit confusing at first, but don't worry, you are not paying double :)


  • Former member
Re: airplane lease amounts
« Reply #3 on: March 08, 2014, 02:36:40 PM »
It also gets reflected back in your Cash Flow statement under "Adjustments of items where a payment is not included", in recognition of the fact (mentioned by dmoose) that these Balance Sheet draw downs (of your pre-payment) show up in your Income Statement, but do not involve a cash transaction in that time period.

Offline B7573

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  • Posts: 725
Re: airplane lease amounts
« Reply #4 on: March 08, 2014, 02:37:57 PM »
thanks for the feed back. case closed.


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