CORPORATE FINANCE

Corporate Finance

Aviation Compliance

Financial reporting topics related to aviation are complex and require volumes of technical data about each flight (flight times, mileage, costs, etc. AircraftLogs make these items easy. Your flight department can use AircraftLogs as its scheduling system, capturing all the data up front. Alternatively, if you have existing data sources, it can be processed through AircraftLogs, eliminating significant work effort across your financial functions.

Industry Expertise

AircraftLogs is represented on the Tax Committee of the National Business Aviation Association (“NBAA”). The Tax Committee focuses on compliance areas of taxes affecting corporate aircraft and the impact of the IRS rules, SEC rules, and the Federal Aviation Regulations. AircraftLogs recommends that anyone managing financial compliance matters related to aviation attend either of the two classes offered each year, providing valuable knowledge and CPE/CLE credit.

Aviation Tax, SEC Reporting and Accounting

Congratulations on having corporate aircraft! In-house flight departments are a strategic weapon for companies competing in the global economy. The travel capabilities provided by business jets or other aircraft suited for your business cannot be matched by other methods of travel. These travel capabilities incur costs which must be managed, allocated and reported – all of which are managed by AircraftLogs in a real-time, configurable interface.

A Fortune 500 company will typically have many “corporate finance” requirements triggered by corporate aircraft. These may impact a number of functions (Tax, Legal, Financial Reporting, Executive Comp, etc.):

IRS SIFL (Standard Industry Fare Level)

Senior employees and their guests may incur SIFL fringe benefit income for certain personal flights. This income must be imputed by the employer via 1099's or W-2's. Commonly known as “SIFL” these specific calculations are prescribed by the IRS for applicable flights.

IRS Sec. 274 Expense Disallowance

In addition, newer IRS rules also require a company to fully disallow a portion of their flight department and aircraft expenses (becoming non-deductible) where senior management or key principals have use of the aircraft which is deemed “personal” for tax purposes. Depreciation is included, so significant tax benefits may be at risk. Most companies provide some level of personal use to executives, and many require their executives to use company aircraft for personal travel because of security concerns, so the new disallowance rules have widespread impact.

The silver lining: The IRS provides four alternative methods for the expense disallowance
calculation. AircraftLogs compares all four methods, allowing you to select the best option.

SEC Proxy Reporting

SEC Registrants must disclose the incremental cost to the company of providing personal use of the corporate aircraft to Named Executive Officers (NEO's) in their compensation disclosures. Identification of the flight hours involved and the definition of "incremental cost" often involves in-depth analysis. Most companies utilize direct operating costs for these flights, but determining which flights apply requires adherence to company guidelines and complex calculations.

Time Sharing Agreements Under FAR 91.401(d)

Time Sharing Agreements are an excellent method for key passengers to reimburse their company for personal use of its aircraft; however, special FAA limits apply under FAR 91.401(d), specialized accounting must follow, and SEC disclosures may be triggered.

Internal Chargebacks and Internal Billing

Many companies employ an internal “chargeback” mechanism, charging the use of their corporate aircraft to the department(s) that use it the most. Chargeback methods used vary by company, but AircraftLogs already manages the most common methods.

If any of these topics apply to your company, AircraftLogs makes it easy. AircraftLogs monitors the regulatory requirements, provides automated tools, and updates the calculations with the new regulations and rates. If you need further help, our Business Process Solution can help you establish and manage your internal reporting processes.

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Recent News

June 20, 2015
AircraftLogs Releases Aviation Intelligence Tools

AircraftLogs announced today the first release of its new “Aviation Intelligence” reporting platform, which provides its software clients with unsurpassed data analysis and reporting capabilities. “If there’s one thing that a flight department generates, its data!” said Jordan Pfahl, leader of AircraftLogs BPS service line. “We’ve now made it possible to provide clients with all sorts of analysis. If you’ve captured the data, we can now help you gain further insight about your specific areas of interest.”

AircraftLogs has led the aircraft scheduling market for years with reporting capabilities and performance metrics. “As flight departments have become more sophisticated, more IT-driven, and demanding more data for consumption, we’re giving them that capability” said Andrew Hartley, leader of the AircraftLogs Standard service line. Read More


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