Westjet 2001 Annual Report Download - page 47

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45
Years ended December 31, 2001 and 2000
(Tabular Amounts are Stated in Thousands of Dollars)
1. Significant accounting policies (continued):
(h) Capital assets:
Capital assets are depreciated over their estimated useful lives at the following rates and methods.
Asset Basis Rate
Aircraft net of estimated residual value Flight hours Hours flown
Spare engines and parts Flight hours Hours flown
Buildings Straight-line 40 years
Flight simulators Straight-line 10 and 25 years
Aircraft under capital lease Straight-line Over the term of the lease
Computer hardware and software Straight-line 5 years
Equipment Straight-line 5 years
Leasehold improvements Straight-line Over the term of the lease
Computer hardware under capital lease Straight-line Over the term of the lease
(i) Maintenance costs:
Heavy maintenance (“D” check) costs incurred on aircraft are capitalized and amortized over the
remaining useful service life of the aircraft.
All other maintenance costs are expensed as incurred.
(j) Capitalized costs:
Costs related to the acquisition of used aircraft and their preparation for service are capitalized and
included in aircraft costs.
Costs associated with the introduction of new aircraft and other assets under construction are
capitalized from inception through to commencement of commercial operations. Interest attributable
to funds used to finance the acquisition of new aircraft and construction of major ground facilities is
capitalized to the related asset.
(k) Future income tax:
The Corporation uses the liability method of accounting for future income taxes. Under this method,
temporary differences between the tax and accounting bases of assets and liabilities are recognized
as future income tax assets and liabilities. Current income taxes are recognized for the estimated
income taxes payable for the current year.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS