Delta Airlines 2015 Annual Report Download - page 72

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TableofContents
Income Taxes
Weaccountfordeferredincometaxesundertheliabilitymethod.Werecognizedeferredtaxassetsandliabilitiesbasedonthetaxeffectsoftemporary
differencesbetweenthefinancialstatementandtaxbasisofassetsandliabilities,asmeasuredbycurrentenactedtaxrates.Deferredtaxassetsandliabilitiesare
recordednetasnoncurrentdeferredincometaxes.Avaluationallowanceisrecordedtoreducedeferredtaxassetswhennecessary.
Manufacturers' Credits
Weperiodicallyreceivecreditsinconnectionwiththeacquisitionofaircraftandengines.Thesecreditsaredeferreduntiltheaircraftandenginesaredelivered,
andthenappliedasareductiontothecostoftherelatedequipment.
Maintenance Costs
Werecordmaintenancecoststoaircraftmaintenancematerialsandoutsiderepairs.Maintenancecostsareexpensedasincurred,exceptforcostsincurredunder
power-by-the-hourcontracts,whichareexpensedbasedonactualhoursflown.Power-by-the-hourcontractstransfercertainrisktothird-partyserviceprovidersand
fixtheamountwepayperflighthourtotheserviceproviderinexchangeformaintenanceandrepairsunderapredefinedmaintenanceprogram.Modificationsthat
enhancetheoperatingperformanceorextendtheusefullivesofairframesorenginesarecapitalizedandamortizedovertheremainingestimatedusefullifeofthe
assetortheremainingleaseterm,whicheverisshorter.
Advertising Costs
Weexpenseadvertisingcostsinpassengercommissionsandothersellingexpensesintheyearincurred.Advertisingexpensewasapproximately$225million
fortheyearsendedDecember31,2015,2014and2013,respectively.
Commissions
Passengersalescommissionsarerecognizedinoperatingexpensewhentherelatedrevenueisrecognized.
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