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OTHER NON-FINANCIAL ASSETS
 12 Months Ended
Dec. 31, 2017
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,  
    2017     2016     2017     2016     2017     2016  
    ThUS$     ThUS$     ThUS$     ThUS$     ThUS$     ThUS$  
                                     
(a)   Advance payments                                                
                                                 
Aircraft leases     31,322       37,560       4,718       14,065       36,040       51,625  
Aircraft insurance and other     17,681       14,717       -       -       17,681       14,717  
Others     10,012       4,521       1,186       1,573       11,198       6,094  
Subtotal advance payments     59,015       56,798       5,904       15,638       64,919       72,436  
                                                 
(b)   Other assets                                                
                                                 
Aircraft maintenance reserve (*)     21,505       51,576       51,836       90,175       73,341       141,751  
Sales tax     137,866       102,351       37,959       40,232       175,825       142,583  
Other taxes     2,475       500       -       -       2,475       500  
Contributions to Société Internationale  de Télécommunications Aéronautiques ("SITA")     327       406       670       591       997       997  
Judicial deposits     -       -       124,438       90,604       124,438       90,604  
Others     -       611       -       104       -       715  
Subtotal other assets     162,173       155,444       214,903       221,706       377,076       377,150  
Total Other Non - Financial Assets     221,188       212,242       220,807       237,344       441,995       449,586  

 

(*) 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, 2017, maintenance reserves total ThUS $ 73,341 (ThUS $ 141,751 as of December 31, 2016), corresponding to 14 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)