Delta Airlines 2010 Annual Report Download - page 61

Table of Contents
Inventories
Inventories of expendable parts related to flight equipment are carried at moving average cost and charged to operations as consumed. An allowance for
obsolescence is provided over the remaining useful life of the related fleet for spare parts expected to be available at the date aircraft are retired from service.
We also provide allowances for parts identified as excess or obsolete to reduce the carrying costs to the lower of cost or net realizable value. These parts are
assumed to have an estimated residual value of 5% of the original cost.
Advertising Costs
We expense advertising costs as other selling expenses in the year incurred. Advertising expense was $169 million, $176 million and $114 million for the
years ended December 31, 2010, 2009 and 2008, respectively.
Commissions
Passenger commissions are recognized in operating expense on our Consolidated Statements of Operations when the related revenue is recognized.
Equity-Based Compensation
We measure the cost of employee services in exchange for an award of equity instruments based on the grant-date fair value of the award. The fair value of
our stock options is estimated using an option pricing model. The cost of equity awards granted to employees is recognized over the period during which an
employee is required to provide service in exchange for the award (usually the vesting period of the award).
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