You are auditing the financial statements of Air Service Inc., an airplane wholesaler that purchases various types of corporate jets for sale to different companies or individuals. Prior to the sale of an airplane, Air Service utilizes the jet for charter service. In reviewing the financial statements, you noticed that Air Service reports these jets before selling them as part of fixed assets and depreciates such planes. The engagement partner questions such accounting and requests that you research this issue as to the proper treatment for these jets used in the chartering service.

using the FASB OR ASU database