Paul TIKI Posted December 31, 2020 Share Posted December 31, 2020 In the flight test world, the impact was financial in a roundabout way. Unlike in normal stocks, where you have to pay taxes on inventory, these parts were already expensed out. All of the parts became a sunk cost for the company. Since they were for testing purposes and at one time been on an experimental aircraft, they could not be sold without additional and expensive certification, and if they were modified they could not be sold at all. So there was no way to make the money back except as scrap. The rub came in insurance. Since the warehouse contained many usable parts, things had to be insured. adding a 3 or 4 million dollar engine (book value) all of a sudden that can add a good bit to the insurance premium. Even if the engine was no longer usable. The hoarding engineers had the upper hand until the insurance quotes came back Quote Link to comment Share on other sites More sharing options...
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