Company: AYR
Filing Date: 2025-04-23
Form Type: 10-K
Source: 0001628280-25-019189
Chunk: 46

Company: Aircastle LTD
Filing Date: 2025-04-23
Form: 10-K
Item: Item 16
Chunk 46
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 estimates of the manufacturer’s realized sales prices are not readily available; and•flight equipment which may have a shorter useful life due to obsolescence.Major improvements and modifications incurred in connection with the acquisition of aircraft that are required to get the aircraft ready for initial service are capitalized and depreciated over the remaining life of the flight equipment.For planned major maintenance activities for aircraft off-lease, the Company capitalizes the actual maintenance costs by applying the deferral method.  Under the deferral method, we capitalize the actual cost of major maintenance events, which are typically depreciated on a straight-line basis over the period until the next maintenance event is required.In accounting for flight equipment held for lease, we make estimates about the expected useful lives, the fair value of attached leases, acquired maintenance assets or liabilities and the estimated residual values.  In making these estimates, we rely upon actual industry experience with the same or similar aircraft types and our anticipated lessee’s utilization of the aircraft.For purchase lease-back transactions, we account for the transaction as a single arrangement.  We allocate the consideration paid based on the fair value of the aircraft and lease.  The fair value of the lease may include a maintenance premium and a lease premium or discount.When we acquire an aircraft with a lease, determining the fair value of attached leases requires us to make assumptions regarding the current fair values of leases for specific aircraft.  We estimate a range of current lease rates of like aircraft in order to determine if the attached lease is within a fair value range.  If a lease is below or above the range of current lease rates, we present value the estimated amount below or above the fair value range over the remaining term of the lease.  The resulting lease discount or premium is amortized into lease revenue over the remaining term of the lease.Impairment of Flight EquipmentWe perform a recoverability test of all aircraft and other flight equipment on a quarterly and annual basis.  We perform a customer or aircraft specific recoverability test whenever events or changes in circumstances, or indicators, suggest that the carrying amount or net book value of an asset may not be recoverable. Indicators may include, but are not limited to, a significant lease restructuring or early lease termination, significant change in an aircraft type’s storage levels, the introduction of newer technology aircraft or engines, an aircraft type is no longer in production or a significant airworthiness directive is issued. We focus on aircraft with near-term lease expirations, customers that have entered 

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Aircastle Limited and Subs