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FTAI Aviation Inflates Sales With New Revenue Recognition Policy
Aircraft lessor now recognizes asset sales it previously excluded from revenue.
March 7, 2023
Though previously arguing asset sales should be excluded from revenue FTAI Aviation (FTAI), a lessor of aircrafts and engines to customers, has changed its mind. Previously, the company appeared to suggest asset sales were not indicative of operating activities as revenue is primarily generated via leases, maintenance, and products.
In its latest annual report, FTAI justified the new treatment like this:
“During the third quarter of 2022, we updated our corporate strategy based on the opportunities available in the market such that the sale of aircraft and engines is now an output of our recurring, ordinary activities.”
No revenue was recognized from asset sales in 2021 or 2020.
In 2022, the change allowed FTAI to inflate reported sales by $208.5 million, or 41.7%.
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