Aircraft Supplier & MRO News - North America.

 
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New York (AirGuideBusiness - Aircraft Supplier & MRO News North America) Jan 1, 2012

IRS writes new accounting rules for asset repairs The Internal Revenue Service issued new rules to clarify the difference between a business expense that is a repair and tax-deductible and one that is an improvement but not deductible right away. Most of the new rules, which touch on everything from the repair of plane engine to a retailer's new roof, take effect on January 1. An ordinary business repair of an asset is generally tax deductible. An improvement is usually classified as a capital expenditure and not immediately deductible. The 255 pages of new regulations, published in the federal register on Tuesday, are temporary, meaning the IRS can edit the rules if sufficiently persuaded by the business community. Earlier this year the IRS issued asset rules specifically for the telecommunications and electricity industries. For years, businesses have relied on case law to determine the difference between a business expense and a capital expenditure. Courts have kept their rulings case-specific in the debate on repairs versus capital improvements. "For a long period of time, this has been an area of disagreement between taxpayers and the IRS," said Michelle Koroghlanian, technical manager for the American Institute of Certified Public Accountants. With limited guidelines in this accounting area, companies often wrote their own procedures and then battled with the IRS when the agency raised objections. In 2005, FedEx Corp successfully challenged the IRS over its accounting procedures for aircraft engines when they are removed from a plane for repairs. The U.S. Court of Appeals for the Sixth Circuit affirmed that FedEx could deduct the engine repair costs and the package-delivery company was awarded a USD66.5 million tax refund. CLAMOR FOR CHANGES The IRS first proposed asset accounting rules in August 2006, but businesses clamored for changes, and in March 2008 the IRS reissued proposed regulations. Those rules are now withdrawn. The new rules may mean big changes when accounting for improvements to nonresidential building property, said Eric Lucas, a principal at KPMG LLP and a former Treasury Department tax counsel who helped draft the 2008 asset rules. The 2008 proposed rules, which never went into effect, "were more favorable to taxpayers for building property" as businesses had more flexibility to report an improvement, such as a new roof, as a current-repair deduction, Lucas said. The new rule for property improvements is "one of the more significant changes" from current accounting policy and could be troublesome for businesses that took "an aggressive view" in deducting repairs, he said. The building-improvement accounting rules will specifically affect the retail sector, which "has been very interested, in particular with store remodel costs," Lucas said. The IRS is also expected soon to release procedures to businesses so that they can ease into the new accounting requirements from their current practices. An IRS spokesperson on Tuesday declined to provide a time frame for when the transition guidance might be released. Dec 27, 2011

AOPA meets with FAA over proposed fees for digital charts The Aircraft Owners and Pilots Association and other industry groups discussed fees proposed for digital charts with the Federal Aviation Administration. "We didn't go in with preconceived notions. ... It was a rich and robust discussion," said Heidi Williams of the AOPA. Dec 19, 2011

AeroMechanical Services AeroMechanical Services Announces Reorganization and Issuance of Stock Options. AeroMechanical Services Ltd. today announced that Richard Hayden has resigned as President of the Company effective December 31, 2011 and will transition to a role within the Company focused on strategic business development. Mr. Hayden will remain a director of AMA. Effective as of December 31, 2011, Bill Tempany, the current Chief Executive Officer will assume the role of President and CEO and Douglas Marlin will be named Chairman of the Board of Directors. "During this past year, Mr. Hayden's focus has been on the development of the business aviation sector and he will now concentrate on closing key deals with three prospective business aviation customers," said Mr. Tempany. Early in 2011, Mr. Tempany assumed much of the day-to-day responsibility for the operations of the Company including the completion of the Automated Flight Information Reporting System (AFIRS*) 228 development program. Mr. Hayden will enter into an employment contract at his existing salary for a period of 16 months commencing January 1, 2012 and receive commissions on sales for the three key accounts for a period of up to 48 months. As part of the change, AMA has granted incentive stock options for 1,000,000 common shares at an exercise price of USD0.20 per share, subject to regulatory approval under the stock option plan approved at the Annual and Special Meeting on June 2, 2011. The stock options' vesting terms are based on the successful receipt by the Company of agreed upon cash payment amounts from the three customer accounts Mr. Hayden is responsible for and have an expiration date of December 31, 2013. A maximum of 10% of the issued and outstanding shares are reserved under the Company's stock option plan. The options are subject to a four-month hold period expiring May 2, 2012. Dec 28, 2011

American Airlines, Boeing American Airlines has completed retrofits on 30 of 76 older Boeing 737-800s in its fleet to mirror the interiors of the new -800s being delivered to the carrier. ATI and Flightglobal first reported about the refurbishment programme in July of last year, and an American spokesman says the carrier expects to complete reconfigurations on the remaining 46 -800s by early 2013, he adds. The work is being carried out in-house at American's Tulsa maintenance base, and currently 106 out of a total of 152 aircraft in the carrier's fleet feature the new interior. While adding seats to the older -800s enhances capacity and is revenue positive, American's spokesman also states the new seats in both cabins - supplied by Weber - are significantly more comfortable. American's new interiors on its 737-800s feature 16 first class seats with a slim-line back design and an articulated seat bottom to better distribute weight while increasing the angle of the seatback. The 144 economy seats also feature the same articulated bottom. Dec 19, 2011

AvWorks Aviation AvWorks Aviation Corp. Announces Management Advisory Agreement with Precision Aircraft Dismantling. AvWorks Aviation, formerly Datamill Media Corp., announces a cooperative Management Advisory Agreement, in which AvWorks Aviation and Precision Aircraft Dismantling (Precision) of Jacksonville, Florida , have agreed that AvWorks will manage Precision's administration, financial, sales and ground operations from AvWorks Aviation's headquarters in Sunrise, Florida . Joel Young , President and CEO of AvWorks Aviation, states, "This agreement builds on the active relationship between us." "Precision operates an aircraft salvage process like no other, and we believe their process will provide an enduring revenue stream pursuant to the terms of our Agreement." "AvWorks team will identify the salvageable assets and will oversee the entire process from scrapping, to quality control, to inventory and asset liquidation," says Young. "Thousands of planes are reaching the end of their asset life cycle over the next five to ten years, and Precision is well-positioned to benefit from this progression," Young continues, "This Agreement is a testament to our goal of building business relationships that will provide our customers with value added services, increase our network of airfield and operator contracts, enhance our parts inventory and increase our revenues." AvWorks Aviation is a diversified aviation and aerospace Company that operates across multiple sectors and services; including supply chain support, maintenance, manufacturing, asset management, dismantling, specialty supply, technical data and aircraft fleet solutions. Precision Aircraft Dismantling, a private company, performs proprietary, low-environmental impact aircraft dismantling, providing airfield managers and aircraft owners with an affordable, eco-friendly alternative to traditional parts reclamation. Dec 19, 2011

Boeing Boeing is stress-testing its parts suppliers. Boeing can't afford costly production delays for its popular 787s and 737s so the plane-maker frequently stress-tests its parts suppliers. The end game is to ensure that there are no weak links that can trigger production shutdowns at a time when Boeing is set to boost its output by about 300 planes a year. Dec 30, 2011

Bombardier Learjet 85 will feature XM satellite radio capability. Bombardier's Learjet 85 will feature cutting-edge avionics when it debuts in 2013, the manufacturer says. "The aircraft features the latest technology in its advanced entertainment system, which offers passengers optimal features," said Ralph Acs, vice president of the Learjet 85 program at Bombardier Business Aircraft. "These include a DVD player, HD bulkhead monitors, XM satellite radio capabilities and internet access." Dec 22, 2011

Continental Airlines, United Airlines, Boeing United-Continental unit Continental Airlines has completed installation of new flat-bed seats in the "BusinessFirst" cabins of its 41-strong fleet of Boeing 757-200s. The newly-retrofitted 757-200s principally operate between Continental's New York Newark hub and Europe. The carrier completed a retrofit of the same type of flat-bed seats on 22 Boeing 777s in December 2010. United, meanwhile, finished retrofitting its Boeing 747-400 and international 767-300 aircraft with flat-bed seats in its premium cabins in 2009. The 10th United 777 to be outfitted with flat-bed seats in both first- and business-class is scheduled to enter service in...

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