How does Disney account for the cost of its new $1.8 billion Disney Adventure cruise ship?

Disney Cruise Line launched its newest ship, the Disney Adventure, in March 2026, marking the company’s first cruise ship to be homeported year-round outside the United States. The 6,000-passenger vessel will operate from Marina Bay Cruise Centre in Singapore, expanding Disney’s presence in one of the fastest growing travel regions in the world. The Disney Adventure is part of The Walt Disney Company’s broader $60 billion investment in its Experiences segment through 2033.

The financial story behind the Disney Adventure is unusual. Disney did not build the ship from scratch. Instead, in 2022, Disney bought the partially completed Global Dream from a bankrupt cruise operator for about $40 million, a tiny fraction of its original $1 billion-plus valuation. At that point, the hull was roughly 60 to 80 percent complete, but it was laid out for casinos and lounges, not Disney’s family-focused experiences.

To turn the ship into a Disney vessel, Walt Disney Imagineering then spent about $1.76 billion completing and retrofitting it: relocating internal steel supports, expanding galleys, gutting the casino-oriented layout, building the at-sea Marvel Landing theme park, adding the first Disney Castle at sea, and outfitting seven themed areas. The total final cost came to approximately $1.8 billion, putting the project right around what a brand-new Disney cruise ship typically costs to build.

For accounting purposes, almost everything Disney spent to acquire the ship and prepare it for cruising belongs on the balance sheet as Property, Plant, and Equipment. The $40 million purchase price plus the costs needed to make the ship ready for its intended use (the retrofit and completion work, design and engineering fees, and other costs to get the ship into operating condition) all get capitalized into one asset account. Disney will then depreciate that capitalized cost over the ship’s expected useful life, typically 25 to 40 years for a cruise vessel.

View a quick tutorial video about accounting for the cost of plant assets at this [link] and then answer the following questions.

Discussion Questions

1. Which of the costs Disney incurred to acquire and complete the Disney Adventure should be capitalized as part of the ship’s cost on the balance sheet, and which costs (if any) should be expensed as incurred?
2. Disney could have built a brand-new ship for roughly $2 billion or completed an acquired hull for a similar amount. From an accounting standpoint, does it matter whether the $1.8 billion was spent buying versus building? Why or why not?
3. After the Disney Adventure begins operating, what new types of costs will Disney incur each period? Which of those costs are likely to be capitalized as part of the ship’s cost going forward, and which will be expensed in the period incurred?
4. How would you decide what useful life to assign to the Disney Adventure for depreciation purposes? What assumptions and judgment are involved?
5. If Disney’s new strategy of basing the ship in Singapore underperforms expectations, how might that affect how Disney accounts for the Disney Adventure on its books?