RE:RE:RE:Profit on C SeriesThe write-down is an acconting obligation which is derived from the fact the the C-Series program could not support its ability to come to market when it had not reached the determine ''viability'' level of 300 sales set by management upon inception of the c-series development.
This obligation was likely induced by Bombardier's auditors after the C-Series has not been able to find buyer for over a year.
The write-down is basically a recognition of the capitalized development costs in the current period as the anticipated useful life of the costs incured for the development of the c-series where not expected to generate sufficient future revenues to offset the full amount of costs incured at that time.
Now that the C-Series has proven to be a viable product (considering the Delta and AC sales), having written down these development costs off will have the impact of reducing the depreciation or amortization expense recognized upon the sale of each aircraft produced and, in turn, show a higher accounting profit margin.
All this however has no cash impact whatsoever.
Pierre, feel free to challenge my accounting knowledge. I would be happy to take you back down memory lane all the way to HEC.