Microsoft Word - Assignment ACCG8142 S2 2020.docx ACCG8142 research assignment – due 29 September 2020 Indications of impairment...

ACCG8142 RESEARCH ASSIGNMENT
DELTA AIRLINE
Table of Contents
Introduction    3
1. Sources of Impairment    3
2. Financial Effects on Delta Airlines from Global and Local Recessions    4
Assumptions    6
Accounting Policies    6
3. If identified Impairments and Forecasts as Analysed Affect Capacity of Delta Airline    7
Conclusion    8
References    9
Introduction
Delta Airlines, which is among the world's best-known international airlines. Delta Airlines is built around many of its abilities, such as "being today's world's leading airline," but many of those abilities begin and end around being able to fly to 567 international destinations in over 100 countries around the world. One of Delta Airlines' key strengths being the world's biggest ca
ier today is to have 10 main centres in all major US cities. Some cities include Cincinnati, New York, Minneapolis, Salt Lake City, Detroit, as well as large towns in various countries like Amsterdam, Tokyo and others. This is one of the biggest "stepping stones" for an American-based airline company, as it is capable of expand its business in every corner of the world.
1. Sources of Impairment
The Atlanta-based airline planned in August 2020 to attach 1,000 flights per day and will add just 500. Demand has eased as cases reported of coronavirus spike and states like New York are telling travellers to quarantine in an attempt to stop the spread of infectious infection. Demand has halted as the virus has expanded across the Sun Belt, especially in the South, especially when combined with the quarantine precautions in place in several of the Northern states. Corporate journey, which usually accounts of around half of Delta's revenue, is not restored, the Board of Directors warns that this will not expect to return entirely to the capacity of business traffic in 2019.
Delta lowered its regular revenue growth from roughly $100 million a day at the end of March to $27 million by the end of June. The airline has even tried to clear that by the end of the year. It said it would have 19 months of liquidity and at quarter-end had $15.7 billion. Delta is likely to have a comparable capital spending and that customers willing to travel have to see newfound hope to even further decrease that amount (Delta, 2020). Airlines are one of the industries that have been severely affected by the pandemic as concerns about the virus and a sequence of unparalleled travel bans in the U.S. and a
oad.
Ca
iers such as Delta have stationed hundreds of aircraft, scraped routes and welcomed tens of thousands of workers to take off unpaid. As indicated by Lau et al. (2020), the first type of risk is geopolitical and economic volatility. Most airline companies like Delta have a global presence and are therefore subject to adverse characterised by political conflict and economic conditions. Good governance and growth of the economy in the commercial aviation sector are underlying factors, which drive long-term growth in Delta Airlines. The second source of risk is their supply chain. Delta Airlines around the world point out that supply chain management is the second biggest threat in the aviation industry and the years ahead – and for valid reason. A record amount of deliveries of new aircraft is set to keep the supply chain extremely busy during the next 8-10 years but due to corona virus pandemic, it is in danger now.
The next source of risk is Ability to deliver on key contracts. The industry's major OEMs typically participate in multi-million - dollar agreements and have huge delays with tight deadlines. Inability to perform on top initiatives can cause serious negative effects that affect both business results and
and recognition. The next risk of source of adherence with a wide a
ay of rules and restrictions, a long list of recommendations for aircraft design, maintenance, flight school activities and safety rules must be met by the commercial aerospace sector. These regulations are critical to operators and passenger safety and keep OEMs and suppliers' products and services to the highest standards.
2. Financial Effects on Delta Airlines from Global and Local Recessions
Many countries have enacted stringent measures to keep COVID-19 coronavirus spreading. These measures have influenced economic activity and sentiment considerably, disrupting the business processes of Delta Airlines. These include decreased demand for their goods or services, or State-imposed restrictions. It depends on the supply chains or has manufacturing facilities in countries hugely influenced by COVID-19 and last is the trading thing with countries hit hard by COVID-19, which affected the transportation, travel of Delta Airlines. As mentioned by Roche (2020), the activity decrease in the market situation and the boost in macroeconomic and business viewpoint uncertainty have ignited a sharp decline in worldwide stock markets, associated with a significant...