Chapter 11, Problem 11.12E

Expensing versus Capitalizing Expenditures—Analysis and Journal Entries, IFRS. Avery Air, Pic, a UK company conducts regularly scheduled maintenance and improvement of its fleet of airplanes During the year, it replaced engines at a cost of £2,900.000, upgraded airplane interiors at a cost of £610,000, and spent £1,300,000 on normal repairs and upkeep, including instrument repair and replacement. The new engines will increase an airplane’s useful life by 5 years. The new interiors will be used for 3 years before being replaced. Avery depreciates each major airplane component separately.