Aerospace & Defense maintenance, repair and overhaul: Revenue recognition and related issues

April 2011
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Aerospace & Defense maintenance, repair and overhaul revenue recognition: PwC

At a glance

This publication addresses challenges in financial reporting and revenue recognition for maintenance, repair, and overhaul operations for aerospace & defense companies.

Our recent whitepaper, Maintenance, repair, and overhaul: Revenue recognition and related issues, explores some of the challenges in financial reporting for maintenance, repair, and overhaul (MRO) arrangements and can assist companies in evaluating and improving their financial reporting for MRO activities. Aging aircraft fleets and outsourcing of large portions of MRO activities by commercial airlines have increased the demand for MRO services. As a result, many of the original equipment manufacturers and independent MRO providers have focused on the MRO market as one area to help drive growth in their businesses.

Since no guidance in generally accepted accounting principles is specific to MRO activities, financial reporting depends on interpretation of GAAP for these arrangements. However, interpretation of how to apply GAAP to MRO arrangements can be complex.