ABSTRACT
This chapter covers the accounting principles that permit aircraft manufacturers, airports, and creditors to know whether the airline to which they grant credit is having trouble paying its bills or even at risk of bankruptcy. It discusses the role of accounting in international airlines and not only has the financial risked that international airlines are exposed to, but also the different techniques to lower these risks. Owing to the unique industry that airlines operate and compete in, airline accounting differs somewhat from that of traditional industries. The chapter focuses on issues that affect accounting in the airline industry. It also discusses the specifics of revenue recognition and how airlines record transactions in their accounting equation, as well as how these transactions affect the industry. The chapter concludes with a closer look at issues affecting international airlines, especially that of currency risk and how airlines have taken steps to lessen the effect of this risk.
