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OTHER NON-FINANCIAL ASSETS
 12 Months Ended
Dec. 31, 2018
Miscellaneous assets [abstract]  
OTHER NON-FINANCIAL ASSETS

NOTE 12 - OTHER NON-FINANCIAL ASSETS

 

The composition of other non-financial assets is as follows:

 

    Current assets     Non-current assets     Total Assets  
    As of     As of     As of     As of     As of     As of  
    December 31,     December 31,     December 31,     December 31,     December 31,     December 31,  
    2018     2017     2018     2017     2018     2017  
    ThUS$     ThUS$     ThUS$     ThUS$     ThUS$     ThUS$  
                                     
(a)   Advance payments                                                
                                                 
Aircraft leases     31,284       31,322       9,687       4,718       40,971       36,040  
Aircraft insurance and other     16,483       17,681       -       -       16,483       17,681  
Others     19,322       10,012       973       1,186       20,295       11,198  
Subtotal advance payments     67,089       59,015       10,660       5,904       77,749       64,919  
                                                 
(b)   Contract assets (1)                                                
                                                 
GDS costs     14,708       -       -       -       14,708       -  
Credit card commissions     21,614       -       -       -       21,614       -  
Travel agencies commissions     12,635       -       -       -       12,635       -  
Subtotal advance payments     48,957       -       -       -       48,957       -  
                                                 
(c)   Other assets                                                
                                                 
Aircraft maintenance reserve (2)     831       21,505       51,836       51,836       52,667       73,341  
Sales tax     187,410       137,866       38,186       37,959       225,596       175,825  
Other taxes     15,255       2,475       -       -       15,255       2,475  
Contributions to Société Internationale de Télécommunications Aéronautiques ("SITA")     258       327       739       670       997       997  
Judicial deposits     -       -       132,267       124,438       132,267       124,438  
Others     1,177       -       53       -       1,230       -  
Subtotal other assets     204,931       162,173       223,081       214,903       428,012       377,076  
Total Other Non - Financial Assets     320,977       221,188       233,741       220,807       554,718       441,995  

 

(1) Movement of Contracts assets:

 

    Contracts assets  
    ThUS$  
Initial balance as of January 1, 2018     -  
Activation     180,171  
Adjustments by the application of IFRS 15     54,361  
Difference by conversion     (5,020 )
Amortization     (180,555 )
Final balance as of December 31, 2018     48,957  

 

(2) Aircraft maintenance reserves reflect prepayment deposits made by the group to lessors of certain aircraft under operating lease agreements in order to ensure that funds are available to support the scheduled heavy maintenance of the aircraft.

 

These amounts are calculated based on performance measures, such as flight hours or cycles, are paid periodically (usually monthly) and are contractually required to be repaid to the lessee upon the completion of the required maintenance of the leased aircraft. At the end of the lease term, any unused maintenance reserves are either returned to the Company in cash or used to offset amounts that we may owe the lessor as a maintenance adjustment.

 

In some cases (five lease agreements), if the maintenance cost incurred by LATAM is less than the corresponding maintenance reserves, the lessor is entitled to retain those excess amounts at the time the heavy maintenance is performed. The Company periodically reviews its maintenance reserves for each of its leased aircraft to ensure that they will be recovered, and recognizes an expense if any such amounts are less than probable of being returned. The cost of aircraft maintenance in the last years has been higher than the related maintenance reserves for all aircraft.

 

As of December 31, 2018, maintenance reserves amount to ThUS$ 52,667 (ThUS$ 73,341 as of December 31, 2017), corresponding to 9 aircraft that maintain remaining balances, which will be settled in the next maintenance or return.

 

Aircraft maintenance reserves are classified as current or non-current depending on the dates when the related maintenance is expected to be performed (Note 2.23).