ABSTRACT
This chapter introduces the reader to various financial statements by analyzing real-world airline financial statements. Accounting standards are one in classifying assets into two major categories: current assets and fixed assets. The airline industry is highly capital intensive, requiring significant fixed assets to operate. Long-term debt represents the total of the liabilities that are due after a one-year period. Common to airlines, long-term debt are various financial instruments issued by the airlines that come due at some later point, less the maturities due within a year, which are current liabilities. In the United States, the Financial Accounting Standards Board (FASB) is the current non-governmental body that helps set the accounting standards required by Generally Accepted Accounting Principles (GAAP). Based on GAAP, corporate accounting departments will produce the following financial statements that are legally mandated to be made available for public corporations: The balance sheet, the income statement, the statement of retained earnings and the cash flow statement.
