Delta- Singapore Airlines Depreciation
Question 1
Calculation of Depreciation Expenses with changing variables.
Data and calculations from the case:
Depreciation Comparison- Delta and Singapore Airlines
Airline Depreciable Life Salvage % Depreciation
Expense/ $100 value
Singapore
< 4/1/89 8 10 11.25
4/89 to case 10 20 8.00
Delta
< 7/1/86 10 10 9.00
1986- 4/1/93 15 10 6.00
4/1/93 - case 20 5 4.75
Formula: Annual Depreciation = {Value - (salvage %*cost)}/Depreciable Life
Where cost = $100, Salvage % and Depreciable life from the case
Question 2
Are the differences in the ways the airlines treat depreciation significant?
The differences are very significant. The depreciation treatment by Singapore shows a 75% greater depreciation in the year 1993 than does Delta. In companies with billions of dollars of tangible assets to depreciate, the total......
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