Aircraft overhaul costs: Skywing Inc. is a small, domestic passenger airline with a fleet of several dozen jet airplanes. Federal regulations require the replacement of certain structural components of the aircraft at fixed intervals. Until recently, Skywings policy has been to immediately expense all the overhaul costs as incurred. The CFO of Skywing says, There are some major overhaul costs were incurring. Is there any way we can capitalize overhaul costs on our fleet?

Research the relevant GAAP and prepare a memo advising the CFO of his options.

Guidelines:

1. Provide the reference of the GAAP codifications that you have used.
2. Explain in your own words what the codification means.
3. Clearly state your opinion.
4. Ensure good writing using a memo style.