Wet Lease Income — ACMI Contract
Recording revenue from leasing an aircraft complete with crew, maintenance, and insurance (ACMI) to another airline.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Receivable (ACMI Lessee) | Asset (+) | 1,800,000.00 | - |
| Wet Lease / ACMI Revenue | Revenue (+) | - | 1,800,000.00 |
💡 Accountant's Note
ACMI (Aircraft, Crew, Maintenance, Insurance) wet leasing generates revenue by providing a fully crewed and maintained aircraft to another carrier, typically at a rate per block hour. Revenue is recognised as the flight hours are operated (service delivered over time). The lessor retains control of the aircraft and crew; the lessee provides fuel and pays airport charges.
Practitioner & Systems Framework
💻 ERP Architecture
ACMI revenue is tracked in the commercial contracts system and invoiced monthly based on actual block hours flown on behalf of the lessee. The rate per block hour is agreed in the ACMI contract. The aircraft remains on the lessor's fleet record — it is not derecognised. The crew, maintenance, and insurance costs continue to be borne by the lessor and are expensed normally. Net margin on ACMI is the revenue per block hour less the direct operating costs (fuel borne by lessee — so fuel cost is zero to the lessor, improving margin). ACMI is assessed under IFRS 16 — if the lessee has the right to use an identified aircraft throughout the contract, the arrangement may contain a lease.
⚠️ Audit Flags
Auditors assess whether the ACMI arrangement is a lease (IFRS 16) or a service contract (IFRS 15). The key test: does the lessee have the right to direct the use of an identified aircraft? For short-term ACMI (wet lease), the lessor typically controls scheduling — service contract treatment. For longer-term dry lease arrangements where the lessee operates the aircraft independently, IFRS 16 may apply. Test revenue recognition against actual block hours flown in the period. Review the ACMI contract for minimum block hour guarantees — guaranteed minimums are recognised as revenue whether or not the hours are flown.
📄 Required Documentation
ACMI contract (rate per block hour, minimum hours, term), block hours operated by month (from flight operations system), IFRS 15/16 classification analysis, minimum block hour guarantee revenue accrual, lessee invoice and payment record, and aircraft cost allocation (crew, maintenance, insurance borne by lessor).
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