writes:

Remember that when you acquire the plane it is "as is". If you figure it
has 1000 hrs to go before engine and prop overhaul, and you figure, for
example, that the overhauls will cost a total of $20,000, then you need to
charge yourselves $20/hr for overhaul reserves even though the actual
per-hour cost is only $10/hr assuming 2000 hr TBO.

Or, to be more fair, set aside a $10K reserve (evenly divided) for the
portion of the TBO already used up, and then charge $10/hr for the
remaining time. Presumably, that $10K appeared directly as a discount
in the purchase price.


All the best,


David