I am not sure, that area is not something I have a good handle on, hence my qualifier at the bottom. This is the sort if thing I had in mind, do you find the following reports accurate ?
"Program accounting was developed by aircraft manufacturers because airplanes have massive start-up costs, but most of their revenues come years later. With program accounting, executives average out costs and profits over a decade or so, reporting both profits and costs each year. It’s a similar method to accounting for long-term projects in the construction industry, accounting experts say."
"They also claim that Boeing took advantage of the unusual flexibility provided by program accounting--a system that allows the huge upfront expense of building a plane to be spread out over several years--to cover up cost overruns and to book savings from efficiency initiatives that never panned out."
"Because the initial cost of designing and building a new airplane can be many billions of dollars, Boeing, along with other military contractors, uses a system called program accounting. Rather than absorb all the costs at once, depressing earnings, Boeing averages them over an estimated number of airplanes it expects to sell."
"During the earnings call on Wednesday, much of the Street will be grilling McNerney and Chief Financial Officer James Bell on why they believe earnings won't be clipped as a result of the schedule misstep or related one-time charges. Boeing declined to make Shanahan available.
McNerney is unlikely to offer insights beyond the fact that he and his leadership team are disappointed. He likely will reassert that the schedule miss won't adversely affect the earnings forecast for the next year. On that issue he probably is correct. Defense and aerospace contractors have an unusual amount of flexibility in their accounting compared with almost any other industry.
Using what's known as program accounting, Boeing can shift revenue from one pocket to another, change production estimates, and revise payment milestones. Costs are absorbed over a block of airplanes, and accountants can extend the block or change sales and cost estimates. The interesting question is whether Boeing will be required to take a charge for period costs as a result of the delay.
Boeing's program accounting should keep Wall Street investors and analysts at bay for the short term. Eventually, though, the wolves will want to know how Shanahan plans to deliver 109 Dreamliners by the end of 2009. Few on the Street or in the aerospace industry believe Boeing can meet that super-aggressive schedule, particularly in light of the recent delay."