Company: AYR
Filing Date: 2025-04-23
Form Type: 10-K
Source: 0001628280-25-019189
Chunk: 50

Company: Aircastle LTD
Filing Date: 2025-04-23
Form: 10-K
Item: Item 16
Chunk 50
---
 the lease incentive liability, and any excess above the lease incentive liability is recorded as a prepaid lease incentive asset, which is included in other assets on the balance sheet and continues to amortize over the remaining life of the lease.Lease acquisition costs related to reconfiguration of the aircraft cabin, other lessee specific modifications and other direct costs are capitalized and amortized into revenue over the initial life of the lease, assuming no lease renewals, and are included in other assets.Income TaxesThe Company records an income tax provision in accordance with the various tax laws for those jurisdictions within which our transactions occur.  Aircastle uses an asset and liability based approach in accounting for income taxes.  Deferred income tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement and tax basis of existing assets and liabilities using enacted rates applicable to the periods in which the differences are expected to affect taxable income.  A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount estimated by us to be realizable.  The Company recognizes the tax benefit from an 

F - 11

Aircastle Limited and SubsidiariesNotes to Consolidated Financial Statements(Dollars in thousands, except per share amounts)

uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities.  We did not have any unrecognized tax benefits.Fair Value MeasurementsFair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We measure the fair value of our cash and cash equivalents and certain of our investments in debt and equity securities on a recurring basis and measure the fair value of our aircraft and investment in unconsolidated joint venture on a non-recurring basis.  See Note 2.Lease Revenue RecognitionWe lease flight equipment under net operating leases with lease terms typically ranging from 3 to 7 years.  We generally do not offer renewal terms or purchase options in our leases, although certain of our operating leases allow the lessee the option to extend the lease for an additional term.  Operating leases with fixed rentals and step rentals are recognized on a straight-line basis over the term of the initial lease, assuming no renewals.In certain instances, we may provide lease concessions to customers, generally in the form of lease rental deferrals.  While these deferral arrangements affect the timing of lease rental payments, the total amount of lease rental payments required over the lease