Boeing's Program Accounting Practices Hide Depth of Losses

Boeing's financial woes continue as its deferred production costs grow again. The company's use of program accounting has allowed it to hide losses and inflate inventories, a tactic that has been employed since at least 2018.

The issue came to light in the second part of an examination by Leeham News & Analysis (LNA) on Boeing's heavy reliance on this practice. According to LNA, Boeing's commercial division has not had a profitable year since 2018, despite being able to set aside excessive production costs in inventory.

One way Boeing smooths out earnings is through capitalizing expenses and averaging them out over the life of an aircraft program. This practice results in understated losses in any given period. For example, in Q1 2026, Boeing reported a $563 million loss on deliveries worth $4.33 million each. However, on a unit-cost basis, these deliveries resulted in a $1.36 billion loss.